Buying a Car • Mercer County, WV • 2 / 4
Getting a Good Car Loan • Mercer County, WV
Compare lenders carefully and get pre-approved before visiting a dealership.
Where to Borrow
- • Credit unions: These usually have the lowest interest rates, butyou may have to be a member of the credit union to take out a loan.
- • Banks: Different banks may have different but similar interest rates for car loans, but you will need to have a relatively strong credit score.
- • Dealer financing: These options usually have the highest interest rates. They may be more convenient, but they are usually more costly.
Get Pre-Approved First
- • Before you shop, get pre-approved by a bank or credit union. This gives you a rate, tells you how much you can borrow, and gives you power at the dealership. Do not let the dealer "help" you finance. Their rates are usually higher.
APR and Loan Terms
- • “APR” is the true interest rate, which includes the base rate plus fees. A lower APR saves thousands. Compare APRs across lenders. “Loan term” is how many months you have to pay back the loan. 48 months is good. 84 months means you’ll pay more interest.
Action Step
- • Calculate how much you can afford for a car based on your monthly income. Contact a local credit union or your bank. Get pre-approved for an auto loan. Write down the APR. Compare at least two lenders.