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If you’ve never purchased a new vehicle before, or if it’s been a while since you have, you may not be familiar with what kinds of interest rates are available right now. Beyond that, what is a good interest rate right now? And what goes into that interest rate? Here’s some answers to your questions.
What goes into an interest rate?
First off, what goes into determining an interest rate? Primarily it’s your credit history, the better that is, the better the interest rate. But beyond that, other factors include the age of the car (the older the vehicle, typically the higher the interest rate), the amount borrowed, down payment, the time length of the loan,
What is a good interest rate?
At the time of this article, interest rates have been teetering at a variety of points between 4 and 5% for a 60-month new car loan. That’s the lowest interest rates have been in the past year, where they have fluctuated up to 6.5%. That’s a great rule stick to measure against when determining what a good interest rate might be in your case.
How can I get the best interest rate?
Well as you can guess from the above facts, there are several things you can to do ensure a low interest rate when purchasing a new vehicle. For one, work on your credit prior to applying for an auto loan. This means not only having credit cards or loans, but paying them off on time, every time.
Beyond that, consider the following factors that can help with lowing your interest rate:
- Purchasing a new(er) vehicle
- Putting down a good-sized down payment
- Choose a shorter-term loan
- Select a vehicle that is within your means
By doing your research before you purchase a vehicle, you can really save yourself in the long run!
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