As the rates of vehicles have increased over the years, it’s almost impossible to buy a car without borrowing. Auto loans can come in different sizes and packages, and some deals are often better than others. Here are some ways to secure one that offers a low-interest rate that works for you.

Improve Your Credit Score

Nothing affects the interest rate you get more than your credit score. The higher it is, the lower your interest rate. Landing a bad deal now means looking for auto-refinancing options later. Therefore, save yourself the hassle and always check your credit score months before purchasing a car. Fix it if there is a need to. Remember, the best strategy is not to gather any debt and pay on time.

Shop Around

Shopping around for a good deal is as important as shopping around to find the best vehicle. Make sure not to limit yourself to the deal you’re being presented currently. There are many other lenders who may give you an even lower interest rate in the same circumstances, hence saving you from the trouble of car refinancing later. Seek out different banks, auto-financing companies or credit unions, etc.


Negotiation is an art, no matter what you are buying. If you already have a backup loan offer, do not hesitate to negotiate with your current lender. Sellers don’t particularly need to offer you the best deal. Negotiating may help you get your rate lowered, or some other fees waived off.

Keep the Loan Duration Short

Keeping your auto loan term short is always a better idea than keeping it long, even if it means a higher monthly payment. The more you lengthen it, the higher the interest you’ll be paying. Ideally, your term should be shorter than or equal to five years for a new car. Most people make the mistake of taking a lengthy loan and end up regretting it and eventually looking for auto refinancing options.

However, if you cannot have a four to five-year loan duration for the vehicle you like, you should probably look for a lower-priced car.

Borrow Cautiously

Remember, borrowing is not as easy as you may think. If you are unable to pay on time or at all, your lender can repossess your car. While some lenders are flexible, others are not and may repossess just because you didn’t pay for one month. In the end, getting a low-interest rate is what determines your journey with a loan in the long term.