Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Mar 12, 2012

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Average car rates change less frequently than those in the housing market, but borrowers usually experience many more available options when it comes to financing a car loan. While auto loan rates aren’t as fluid as their mortgage counterparts, borrowers can sometimes score large rebates or zero-percent financing options depending on their dealer.

[loansform]Dealer financing is the means one would go through in order to find a zero-percent interest rate. However, zero-percent deals are often only offered on more expensive cars, and dealers tend to be much less likely to drop the marked price on the vehicle.

As a result, zero-percent financing often prove not to be deals at all, but instead just a lure to trick unsuspecting buyers into purchasing a car at full price.

Auto loans offered by other lending sources usually have rates tied to government securities, so their rates fluctuate up and down given the strength of those securities. Since there is no intermediary between lender and buyer, car loans from a traditional lender tend to come at lower rates than they do at dealerships. This is because dealerships often mark car rates up in order to make a profit as a middleman.

Another benefit to getting pre-qualified for an auto loan is that having cash in hand grants borrowers more power and leverage when it comes to bargaining with a dealership. If a price is high, a pre-qualified borrower can bargain it down without fear of the car salesman making up for that price come the financing phase of negotiations.

Using this site’s free-to-use quote generating forms, prospective borrowers can compare car rates from multiple lenders and assure themselves they’re getting the best deal available.