Auto Refinancing
Auto loan refinance

Auto Loans: Fast, Cheap and Easy

Financing a new car or truck in today's economy is significantly easier than in years past. Thanks to a less than stable economy in the recent years, people are holding onto their vehicles longer, and buying used cars in an effort to save money. While this isn't good news for car manufacturers and dealers, this is great news if you are car shopping. In an effort to entice buyers, interest rates are low and getting approved is a breeze, even if your credit is less than perfect.

Lenders need borrowers to make a profit, so whenever possible, they want to approve the borrower’s application for a car loan. When a lender makes a decision, they are looking at the risk associated with lending you the money for your vehicle purchase. Your credit score largely determines this risk, although your work stability and other factors will play a part in the final decision, especially if your credit isn't perfect. Be sure to have your insurance information ready for faster processing. If you don't have insurance yet, or are shopping around a resource like is a good place to start comparison shopping. The majority of people looking to buy a car will find a car loan through one of three sources: their bank or credit union, the car dealership, or online.

Getting Approved: Fast, Faster and Fastest

  1. FAST: If you have an established relationship with a bank or credit union, you may feel most comfortable sticking with a company you trust. Typically, a credit union or bank can make a decision on financing within a day. If you are shopping for a car after business hours or on the weekend, you may have to wait for approval until the next business day. Since the vast majority of people shop for new vehicles over the weekend, your bank or credit union may not be the best source for instant gratification, but the rates may be the most favorable.
  2. FASTER: Dealerships almost always have established contacts with finance companies and loan brokers. When you apply for a loan with a dealership, the financing department will either run your credit for an in house loan, or shop your application to third party financing companies. If you have good credit, this can be an advantage, as you will have the opportunity to accept the best possible interest rate. If you have weak credit, this can be a bad situation, as sub-prime lenders often have shady terms and abnormally high interest rates. The good news is that you will typically have an answer within a very short span of time, under an hour in most cases.
  3. FASTEST: Doing the legwork yourself by shopping for auto loans online may save you a significant amount of money over the life of your loan. Without the pressure of a salesperson trying to close the deal, you can get preapproved and secure the best possible interest rate, despite credit challenges. Armed with your pre-approval, you can be in and out of a dealership with your new car in a flash.

APR: We Like it Cheap!

According to, the average interest rate on a 36, 48 and 60-month new car loan is below 4.5%. A full percentage point, or more, below last year’s rates equals several hundred dollars in savings. Before you hop on board with a 3 or 4% APR, be sure to rule out 0% financing from your dealer.

In early July of 2012, 60 models were available from dealers with 0% APR deals, and over 30 additional models had 1% APR. While those rebates are enticing, if you figure out your long term savings, you almost always win with a low APR over cash back.

EASY: You Don’t Have to Drive a Junker Just Because Your Credit Has Dings!

Just a couple of years ago, obtaining an auto loan with less than a 680 credit score was a near impossibility. As a result, buy here pay here lots and predatory lenders were on the rampage. Today, it’s a bit more difficult to find someone with a perfect credit score, and lenders need to lend money. As a result, you'll find that getting an "approved" stamp on your application is a lot easier than it was the last time you shopped for a new car or truck. If you didn't get the best deal the first time around, look into refinancing - you could save a lot of money.

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