So, after meticulously researching and test-driving, eventually, you have managed to zero in on your dream car. But, do you really think your hassles are over? Hardly, especially if you have plans to acquire a car loan for your purchase. Well, buying a car loan may look like a straightforward task. Indeed, it is, however, getting the best rates for your loan really puts your negotiating skills to the test. If you are looking to get the best deal on your car loan, make sure you have pursued these 5 steps.
Make A Smart Choice For The Car Model
Yes, choosing a car model is entirely your call, but I am sure you are not aware of the fact that your choice is convolutedly associated to your decision on the car loan. Not many people realize the fact that interest rates can differ from various car models even if the loan is taken from the same bank. While deciding the rate of interest for the car loan, there are two things that matter the most – age and segment of the vehicle. Interest rates for the less popular and outdated models are more as compared to the new and advanced cars.
Time Of Your Car Loan
If you thought the timing is only important for the e-commerce portals, then you need to think again as it is equally important when it comes to acquiring a car loan too. Rising competition in the car loan industry means that the banks have to meet their monthly targets. This is the reason you should avoid approaching the bank in the starting of the month, instead pay a visit near the month end, this will certainly put you in the driver’s seat.
Like I have just mentioned that the banks have monthly targets, so in case the banks are falling short of their targets, they will offer you cheaper deal as compared to their competitors.
Avoid Pre-Approved Car Loans
In case, you are tempted by the car loan offer given by one of your local car dealers, then make sure you have said ‘NO’ and move on. Usually, car dealers are seen offering such car loans to the clients and most of the times, the customers accept these loans in order to save the hassle of visiting the branch again and again. Most of the times, car loan service providers have a tie-up with the car dealers and they even try to draw your attention with discounts on the car accessories for the customers opting for the loan. Avoid the car loans offered by any of the car dealers and put your best efforts in finding an independent deal.
Go For Public Banks Over Private Banks
Public sector banks are known to offer questionable customer support services, however, on the positive side, the bank can at times help you save you money in the long run. Regardless of whether you have opted for floating or fixed interest rate, opting for a car loan from a public sector bank will get you a lower interest rate as compared to a private sector bank. In addition, most of the bank occasionally offer discounted rates in different car melas.
Go For A Higher Down Payment
A cheaper car loan and minimum down payment are not closely associated. If you settle for a minimum down payment, you can have a car loan for yourself, however, it won’t prove fruitful for you in the long run. When you opt for paying higher down payment, then it certainly reduces the loan amount. The best part is that this results in lower interest rate payment and reduced EMI.
Author Bio: Ankita is a freelance writer who writes about finance, loans, credit cards and insurance.