What is a Good Interest Rate for Your Car Loan?

If you’ve ever taken out a loan, you know that the interest rate is one of the most important factors to consider while comparing offers. And, if you’re getting ready to buy a new or pre-owned Mercedes-Benz, you’ve almost certainly wondered, “What is a good interest rate on a car loan? Fortunately, it’s easy to beat the average when you study up with Mercedes-Benz of North Scottsdale.

What Is the Average Interest Rate on a Car Loan?

What is a good car loan rate? To answer this question, it’s essential to take a look at the average amount paid by drivers near Mesa and Fountain Hills.

So, what is a good interest rate for a car loan? If you have “Prime” (above 660) or “SuperPrime” (above 780) credit, your annual percentage rate should fall between 3% and 4%. Most drivers secure these rates by choosing three-year loan terms. If you select a longer term, you might get a lower interest rate, but you will still probably end up paying more over time.

How Do You Get the Best Interest Rate?

Want to make sure that you’re getting the interest rate that you deserve? Even if your credit isn’t perfect, you can take the following steps to beat the average:

• Know your credit score, and bring proof of income. The confident, knowledgeable driver is more likely to get approved.
• Shopping around for the best auto loan rate is almost always a good idea. However, if you’re going to make multiple applications, you’ll want to submit all of your paperwork within a 14-day window. Spreading out your applications doesn’t look great on a credit report.
• The interest rate isn’t the only factor you should pay attention to. If you get a rate that’s much lower than the average, check the loan term and look for hidden fees.
• The best way to build up your credit is to make as many on-time payments as you can! You should also pay off your largest outstanding balances, and try to get your total debt down to below 30% of your maximum limit.

Lastly, we want to point out that it often pays to negotiate. If you think you should be getting a better interest rate, try to apply at other locations and see if you can get lenders to compete for your business. The same goes if you’re considering a refinancing plan. Do a little shopping around to make sure you’re not paying more than you have to!

Finance Your Mercedes-Benz with %di_name%%

Still doing research? Compare buying vs. leasing to save even more, or explore options like GAP insurance with our finance department.  If you want to sit down with an expert on our financing team and learn more about what is a good car loan rate for our drivers, come visit us in Phoenix today!