Overhaulin'

What is a reasonable interest rate for a used car loan?

I plan on purchasing a used car from a local dealer, and go shopping at several car dealerships. What is, in your experience, a reasonable, most used interest rate for the car loan financed through the dealership?

Public Comments

1. Just did a used car loan at a local bank at 8.5%. Dealers may be different. Sometimes they use a low rate to get you to buy, but keep the price higher to make up for it.
2. Pre-arrange your financing before you find the car. Dealerships make alot to money from the financing. Let's say the call back or approval from a bank is 7 percent...they contract the deal at 10 percent and the bank gives them the extra money...but, I think you already know that. You can also be preapproved online (Road Loans is one source and there are others), they will send you a draft that you take to any participating dealer and it is as good as cash. Take the dealer out of your finances and you will be the one that wins. Also, be careful of expensive extended warranties, shop those online also if you are interested in them, prior to finalizing any deal. Good luck!
3. My average credit got me 8 % a few years ago. But the Fed.Res. just dropped the prime a full freakin' 3/4 point to stop a slide into recession today. I'd hold off...ask over in Business & finance Yahoo see what their take is.
4. I found an offer for 7.something%, but that was through my bank/credit union. Seriously, though, see if you can just pay for it outright and use that as leverage in negotiating a lower price. Most won't want to budge from Kelley Blue Book value for dealerships and STILL tack on fees to sell it to you. See if you can haggle the APR the purchase price. See if there's a prepayment penalty and, if not, pay more than what's due so that you can be done with the debt earlier and pay less in interest overall. (This is part of why a large down payment is a good option.) Good luck. Also, a good site is... http://www.surveyland.org/jump.php?link=auto Take care.