Part of what will determine how much you’ll pay for your car loan is APR, or interest rate. You can lower APR on a car in various ways, which Andy Mohr Speedway Chevrolet is here to tell drivers in Indianapolis, Fishers, and Speedway, IN, all about!
Before we explain how to lower the APR on a car, it’s essential to know what it is and how it works. APR (Annual Percentage Rate) is the cost of borrowing money from a lender to buy your car. Fees and interest charges are factored into the final number.
Your APR will be decided after several factors have been considered, such as credit score, payment history, loan amount, loan-to-value ratio, loan term, and other fees.
Great question! If you want a low APR on your car, follow these steps:
- Apply to refinance your current car: You should be able to refinance your existing car loan anytime. The APR you receive should be less than the original if your credit score is good and you’ve been making payments on time for at least six months.
- Keep a good credit score: Your credit score will go a long way toward determining your APR. Keeping a good score will give you a more favorable rate. Typically, a score of 660 or higher is considered good.
- Make a significant down payment: A big down payment should make your monthly payment more manageable. Additionally, the higher the down payment you make, the lower your APR may be.
- Make additional monthly payments: You'll be in a good spot as long as you make your payments on time. However, making extra monthly payments means you’ll pay less interest.
- Compare rates: Shop around for low rates and flexible lenders, just as you would with a car!
- Consider adding a co-signer: If you’re in a less-than-ideal credit situation, you can still get a low APR on your car if you add a co-signer to your loan.
- Look at short-term loans: Short-term loans mean your APR will likely be low. However, be prepared to make larger monthly payments.
Now that you know about lowering the APR on your car, you’ll set yourself up to have a payment and interest rate you’re comfortable with.
When you’re ready to finance your car, come to our finance center, where our team will help you create a unique plan with an ideal APR! Explain your needs and apply for financing. Then, our team will work their magic!
Help your APR by using our Value Your Trade tool, as you can use the trade credit from your current car to make a sizeable down payment on your new one!
If you want to lower the APR on your car, Andy Mohr Speedway Chevrolet can help! Drivers in Indianapolis, Fishers, and Speedway, IN, can contact us today to get started on a car loan!