Finding the right car loan can save you thousands of dollars over the life of your loan. Here are 9 expert tips to help you secure the best interest rates and terms for your new or used car.

1. Check Your Credit Report and Score

• A higher credit score leads to lower interest rates.
• Review your credit report for errors or discrepancies.
• Get free reports at AnnualCreditReport.com.
• Many banks and credit card companies offer free credit scores.

2. Improve Your Credit Score Before Shopping

• Correct any mistakes on your credit report; most disputes are resolved within 30 days.
• Pay down existing debts and avoid late payments to give your score a quick boost.

3. Set a Budget—and Stick to It

• Determine what you can afford, considering your needs now and in the future.
• Avoid upselling tactics that push you into a bigger or more luxurious car than necessary.

4. Look Beyond Monthly Payments

• Dealers may focus on monthly costs, but low payments can mean longer loan terms, increasing overall interest paid.
• Aim for a shorter loan term to avoid being "upside down" (owing more than the car is worth).

5. Make a Larger Down Payment

• Experts recommend a 15-25% down payment to reduce your loan amount and interest costs.
• Larger upfront payments shorten loan terms and save money in the long run.

6. Get Preapproved for a Loan

• Contact your bank or credit union for preapproval before visiting a dealership.
• Preapproval strengthens your negotiating position and provides a baseline to compare dealer financing.

7. Shop Around for Subprime Borrowers

• If your credit is poor, check automakers’ financing deals on entry-level models.
• Credit unions and banks often offer better rates than dealer-based financing for subprime borrowers.

8. Consider Buying a Used Car

• Used cars often cost less upfront, reducing loan amounts.
• Watch for higher interest rates on used-car loans, especially at “buy here, pay here” dealerships.
• Research the vehicle’s history and have it inspected before buying.

9. Be Aware of Loan Discrimination

• Studies show Black and Hispanic borrowers may face higher interest rates.
• Report suspected discrimination to the Consumer Financial Protection Bureau or the Federal Trade Commission.

Pro Tips to Save More

• Negotiate Loan Terms: Use preapproval to power better terms from dealers.
• Avoid Long-Term Loans: These increase overall costs and risk being underwater.
• Check for Rebates: Some utilities or organizations offer rebates for specific car models or eco-friendly choices.

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