Choosing the right car for you and negotiating a price at the dealership can be a long and anxiety-ridden process. But the work isn’t done once you agree on a price.
Next, unless you’re prepared to pay for the vehicle in cash, it’s time to talk to the finance office. Car dealerships are happy to offer you financing, but you shouldn’t trust that your dealer has the best rate. Before getting too far into your car shopping process, check car loan rates from your own bank or credit union. Take proof of that quote with you when you go car shopping. Your dealer is likely to do their best to match the rate you were offered; if they can’t, they’ll help you complete the process to use the financing offer you have.
It may feel like a lot of work for an interest rate that’s close to what the dealership might offer you. But consider that 1 percent of a $15,000 car is $150. Why pay an extra $150 for your new wheels if you don’t have to?
Checking your credit for a loan does impact your credit score, and you may see it decrease by a few points while you’re car shopping. But don’t let that prevent you from doing your own research and shopping around. Credit bureaus can tell when you’re shopping for a large purchase and will lump those preapproval inquiries into a single event on your credit report.