Best Auto Loan Rates: Essential Factors to Consider

How to Get the Best Auto Loan Rates
A new car coming out of a dealership

When it comes to car loan financing, few names are as iconic as Philly Auto Loan Center. Known in Philadelphia for financing some of the finest automobiles, Philly Auto takes pride in having the largest selection of Pre Owned vehicles. Our reputation in the Philadelphia area is built on a commitment to transparency, a customer-friendly experience, and consistently exceeding expectations. It’s important to mention that our staff shows remarkable loyalty, with most team members being with us for 15+ years, and some for even 40+ years.  We’re a family-owned business, and we treat our customers and employees as extended family members. We are grateful for the support of our customers and eagerly look forward to serving our community to the best of our abilities.

How We Can Help

In a matter of seconds, you will receive the financing offers with individual annual interest rates from various banks. You can choose the best offer and apply for it directly.

Car finance can be full of challenges if you are unaware of how auto loans work. Many buyers need help with getting the best auto loan rates. Most Americans follow a common practice: going to a dealership, applying for a loan to buy a new car, and getting their vehicle out. 

How to Get the Best Auto Loan Rates?

Keeping the above information in the picture, you may wonder how to get the best auto loan rates in the competitive market. We have covered a few important factors that can favor you when buying a new car.

Optimize Your Credit Score

Most car buyers rush to buy a car and settle a deal with the dealership. It can impact your financial status in the long run. Optimizing your credit score is the best way to get suitable loan rates. When you apply for an auto loan, loan officers thoroughly check and validate your documentation to determine your monthly expenses and income. They also verify your personal information, including employment status, ID proof, and physical address.

The most crucial of all factors is your credit history. If you have a good credit score, you may have more flexibility (in terms of monthly payments). Bad credit scorers have very limited options to decide. You may take a few steps to improve your loan chances if you have a moderate-to-low credit score. We have listed a few things you can try to boost your credit score.

Clear Your Revolving Debts

Regardless of your credit history, revolving debts can greatly impact your score. Credit score depends on your debt-to-credit ratio, which varies based on your debt amount and payback schedule. Your score will automatically decline if you have more debt than your annual income. Paying your revolving debts can boost your credit score.

Request an Increase in Credit Limit

In some cases, requesting a credit limit increase can favor you in terms of auto loan rates. A higher credit limit positively impacts your debt-to-credit ratio. Typically, a credit limit increase can lead to temporarily dropped credit scores. If you notice such an effect, you may wait a few weeks for improvement.

Your credit history is an important factor to remember before you request a credit limit increase. If you have a consistently good credit score, pay your debts on time, and maintain a good debt-to-credit ratio, you have a better chance of getting a higher credit limit. You may not want to request an increase with poor credit history.

Make Error Corrections

Car buyers often face problems due to errors in their credit reports. These errors may include falsely quoted data, inaccurate account history, and more factors (depending on your credit limit and income sources). Sometimes, buyers have accounts on their credit reports that belong to other entities. Such problems can lead to poor credit scores.

A good rule is to get a copy of your credit report and check it thoroughly to determine the accuracy of the information. If you notice problems, you may contact your bank and refine your report to enhance your credit score.

Maintain a Good Payment Schedule

When planning to apply for an auto loan, you may work on your payment schedule and make other payments within deadlines to create a good impression on loan officers. More often, those with delayed payment schedules create trust issues, leading to smaller loan approvals and higher interest rates.

Even if you had a poor payment history some years ago, recent improvements could help you gain an advantage when applying for an auto loan.

Save a Bigger Downpayment

Many Americans pay smaller downpayments due to a lack of saved funds. Smaller upfront payments can impact your vehicle cost. Auto loan officers slash some part of monthly payables when you pay a higher downpayment. You can save up for a few months to push your downpayment to 30% or more.

The higher your upfront payment, the less you pay for your car. Auto loans facilitate buyers who cannot afford cash buying. Since it is a favor, it costs more than cash purchases. However, the cost can vary depending on how much you initially pay.

You can also opt for pre-approved car loans to save time and hassle. Pre-approval allows you to have a fixed budget while deciding your vehicle options. Typically, loan officers require basic preliminary data to conduct a soft credit check. Once done, you may receive a budget for your car (you can also buy a used car).

Pre-approved car loans come in handy when you do not have specific car preferences. Some users opt for an on-the-spot approach to make purchase decisions. For instance, if you need a car in the next few weeks, you may apply for a pre-approved loan to determine your car options within the loan’s range.

After comparing your loan choices, you can decide on the best auto loan rates in your city for an informed choice. Talking to a finance expert can help you learn the ins and outs of auto financing.

Philly Auto has established a firm footprint in Philadelphia, PA, for its flexible auto finance services. You can choose from a vast collection of new and used cars to fit your needs. Get in touch with the dealership today to determine your options.