Money Minute: Tips for cheaper car loan interest
PITTSBURGH (KDKA) -- Looking to buy a new car anytime soon? Here are some tips on how to get cheaper interest rates on your car loan.
With the price of a car or truck -- even a used one -- so very high these days, most of us have to get a car loan. That means paying interest on the loan that can range from 3.5 to over 10 percent.
So what can you do to bring down that interest rate and monthly payment?
First, increase your down payment. Obviously the more cash you pay up front, the less you have to borrow.
Second, raise your credit score. The higher your credit rating, the lower the interest charged. And if your credit is not great, add a co-signer like a spouse with a better score.
Third, buy a newer car. Frequently the older the car, the higher the interest.
Fourth, choose a shorter loan term. A three-year loan will often have a lower interest rate than a seven-year loan.
Fifth, shop around. Check out your car loan options before you walk into the dealer. You'll be glad you did.