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Tell us what you're looking for and here you live so that we can find a trusted dealer near you who offers competitive Internet prices
When you buy a car, the car dealership will offer to help you with your financing. They send your credit information to the different banks and lenders they have business relationships with. You may want to check your credit beforehand. A quick credit check can reveal costly mistakes in your credit history.
When you are approved for the loan, the banks will send back the dealer's 'buy rate' for your loan. This is the interest rate the bank will offer for your financing through this dealership. As a charge for this service, many dealers mark up this rate to pay for costs associated with finalizing the contract and processing all of the paperwork for the bank. Note that even with a mark-up, you may still be getting a very competitive rate through the dealership. Many dealers send millions of dollars a year in financing to banks, and banks, in turn, offer them especially low rates for auto loans.
So how can you be sure it's a good deal? It's a good idea to educate yourself before you buy. Shop a couple of banks, credit unions and sites like Bankrate.com to see what their rates are for car loans. You'll want to find the lowest rate you can get at the term you want for the amount you need. Pay special attention to the term and total amount you can finance. For instance, some banks may offer low rates, but only for shorter terms like 36 or 48 months. While shorter terms save you quite a bit on interest, they also significantly increase the monthly payments. Some banks may even require a substantial down payment to qualify for their lowest rates. Many charge closing fees and processing fees. Credit unions may also have similar restrictions. Be sure to take all fees into account.
Online financing from online services like E-LOAN is getting more popular. You can apply and be approved online, and because of low overhead and volume, they often have good rates.
When you are at the dealership, ask what rate they can offer; if you can do better, tell them. Make sure you have done your research first and have taken all fees into account. You may find that the dealership will lower the rate to meet or beat what you can get at your bank.