While more and more Americans are opting to use public transportation and ride share companies like Uber, statistics show that the need to own our own vehicles is still prominent with 91% of US households owning at least one car. Out of all of those cars, nearly 85% of them are financed through a loan or a lease. What if all of those buyers could have secured a loan with better rates, one that could have saved them thousands of dollars over the years?
Most cars are still financed through the dealership, but the average markup at these locations is 2.5%, not to mention the slew of additional fees that are incurred. With the help of online tools, those buying a new car can find far better rates that are available to them from separate lenders, especially when they compare banks.
A Little Research Goes a Long Way
A quick google search will yield a wide variety of websites that can show you the pros and cons of different banks, as well as the types of loans they offer, what rates you can expect from them, and what they have to offer those looking to refinance. You can find reviews online that can give great insights into how well a company performs and how satisfied their customers are with the whole experience. Taking advantage of this information can help you find the best rates from the best company possible. Read here for a good resource on whether it’s a good idea to refinance.
Reaping the Benefits
Many major banks will offer incentives for those looking to finance their vehicle through them to become members and open up an account. Most will offer an additional percentage off of the regular interest rate to their existing customers, or even work with them to formulate the best loan possible. Those looking for a more personal experience can also take advantage of the thousands of branches these major banks have.
Interest rates are always changing in the world of auto loans, but here are a few up to date examples to give you an idea of why it makes sense to compare banks.
For a used car loan, LightStream offers 2.49%, but you must have excellent credit. While Capital One offers 2.89%, but works with those who have less than perfect credit. Based on your credit score, you have the potential to save more money through LightStream, but a closer look at Capital One reveals that they accept cars up to 10 years old with a maximum of 125,000 miles as well as offer fantastic customer service, while LightStream has stricter limits and does not conduct any service offline.
For a loan on a brand new car, LightStream offers 2.49% on both a 60 and 48 month term, but PennFed offers 2.24% for a 60 month term and a mere 1.99% on a 48 month term. Each has their own rules for qualifying credit, but it would clearly make more sense to take out a 48 month loan from PennFed.
Making the decision depends on what it is you want from your lender. In some cases that might mean the absolute lowest interest rate possible, in others it may mean exceptional and personal customer service from a lender who is willing to work with you throughout the length of your loan. Taking the time to compare these institutions ensures that you will be satisfied with the end result.
Finding the Best
There are more banks willing to offer you a loan than you might care to count, which makes finding the right one that much more important. Utilizing the online tools available to you, you can make sure that you end up with a reasonable loan from a company you can rely on.