Step 3, Part 1: Time to Make a Deal

Page 8 of 17

Don't Wait to Finance

Woman holding a silver dollar and giving a thumbs up

There’s one last thing to do before you go to the car lot. Consider lining up your financing ahead of time.

There are many places to get financing for an auto loan and while you may be able to get financing from the dealer, it’s not always going to be the cheapest option. And even if it is, knowing your options is just another card that’s in your hand and not the dealer’s.

So where can you find financing?

Banks and Credit Unions

It’s possible to have these loans approved before you ever enter the showroom. If you have an established relationship with a bank or credit union, this may be the cheapest option.

Online Lenders

Online financers have the benefit of low overhead and can offer some pretty attractive rates. Do your research and make sure the online lenders are backed by the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Better Business Bureau (BBB).

Home Equity Loan

This option may offer a reasonable interest rate and a tax deduction; however, you could end up paying on a loan for a car that you’ve long since sold or traded. Also, you should consider carefully if this option will put you in danger of losing your home. If times get tough, ask yourself if you’re willing to risk your home to back your car loan.


Depending on your credit score, the dealer can sometimes offer you the best rate. However, be sure that the dealer isn’t making up the difference by raising the price of the vehicle.

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