The Best Time to Get a Car Loan

If you need a new car right now, then the best time to get a car loan is today. But, if you are not in a hurry and want to get the most mileage out of your money, shop for the best deal - when interest rates are lowest, the deals are the finest, and your credit is at its best.

Interest rates- how high?

Interest rates are the cost of borrowing money. When the economy is going full-tilt and there is a lot of production or when there is a lot of capital available to lend, interest rates will be low. For the past few years, we have been experiencing a tremendous abundance of credit and credit rates have been very low. In fact, at one point recently, some car companies, with too many cars in their inventory were offering zero interest loans. That is about as low as you can go, unless you are paying customers to buy. Actually, rebates in the thousands of dollars are a form of interest reduction as well.

Right now, with excellent credit, you can expect a 6.00 to 6.75 percent loan from a conventional bank for a new car loan for 36 to 60 months. On the other hand, loan rates quoted from online lenders are as low as 4.05 percent. Over the past six months or more, interest rates have been slowing rising. So, right now is a very good time to catch interest rates at their lowest point, possibly for a long time to come.

When the deals are the finest

The best time to get your car loan is also when the prices of new cars are at their lowest. Look for the best deals at the end of the season, just before the dealer needs to make room for the new models. Of course, this really means that your new car is already a year old. But, car deals can also be at their finest during the slow seasons, like right after the New Year. In fact, one of the best ways to tell when the deals are the best is to watch for the ads on television and in the newspaper. When you see one car advertisement after another on the television, chances are that dealers are ready to deal.

When your credit is the best

The other best time to get a loan is when your credit is the best. Since interest rates are low, now is the time to pay down your debts and get your credit rate as high as you can. This will ensure the lowest interest rate on your loan.