Rising Interest Rates | Tips and Advice | Edmunds

Car-Buying Tips and Advice: How to Prevent High Interest Rates on a Car Loan

Edmunds senior consumer advice editors Matt Jones and Ron Montoya describe how shoppers can keep from being targeted for a car loan with a high interest rate.

Ron: Hi, I'm Ron and this is Matt. We're both senior consumer advice editors at Edmunds.

Matt, I want to give you a thought experiment: Imagine you're someone who's looking to finance a car in a few months, but you're afraid that you'll be targeted for a high interest rate based on your race, age, gender, poor credit or anything else. What are some steps you can take to prevent being overcharged for a car loan?

Matt: It's sad to hear that these things happen, but the best counter to this is to do some research. Here's what you should keep in mind:

* Plan ahead: If your credit isn't in order, pay some bills or do whatever you need to do to improve your score.
* Prepare to negotiate: You may not be offered the best rate right off the bat. Don't be afraid to negotiate for a better rate.
* Shop around for your loan: Try going to another dealership. You may get a better rate from a different car brand.
* Get preapproved: If you have a preapproved loan from a bank or credit union, you can compare it to what the dealer is offering and choose the one with the better rate.

Ron: That's our tip for today. For more details on how to get the best interest rate on your car loan, take a look at our article "Getting the Best Car Loan Interest Rates" on Edmunds: https://www.edmunds.com/car-loan/getting-the-best-car-loan-interest-rates.html

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