When you walk into a car dealership and decide that you want to drive home in a new automobile, making sure that you get the very best interest rates could save you thousands of dollars over the life of the loan. Most people automatically think about their down payment and monthly payments, but how much thought really goes into the actual interest rates? After reading this article, you may be looking at auto loans in a way that could save you a considerable amount of cash.

When applying for an auto loan, you will get lower interest rates if you have a trade-in and/or a significant down payment. Why? Because the lender will see that you have a vested interest in the vehicle and are more likely to repay the debt as opposed to allowing it to be repossessed due to non payment. When you are a lower credit risk, lenders give you better interest rates.

At different times throughout the year, car dealers and/or manufacturers will offer a promotion that involves the customer's choice of a cash refund or little/no interest on their car loan. In this situation, the cash offer would be the most tempting. However, the best deal and the one that will save you the most money will be the little/no interest option over the life of the auto loan.

When you apply for a car loan, there are a number of other factors that will also impact the interest rates that you receive. One of the most important is your credit score. The higher your credit score, the lower your interest rates. If possible, avoid applying for any type of credit at least six months prior to applying for an auto loan. In addition, try to pay down as many other debts as possible, especially high-interest credit card debt. When you have a low debt to income ratio, lenders will view you as more able to repay an auto loan.

It is widely recommended that consumers check their credit reports every six months but, if you are considering applying for a car loan, there is no better time than now to make sure that your credit report is accurate. Every 12 months, you are entitled to request a free copy of your credit report from each of the three credit reporting agencies, including TransUnion, Equifax and Experian. Upon reviewing the information contained in each report, make sure that balances, payment history and contact information is correct and updated. If anything needs correction, file a dispute with the credit reporting agency and await correction. Inaccurate or outdated information on a credit file, especially if it is derogatory, could cost you a lot of money in interest rates or possibly even result in the denial of your car loan altogether.

If, for any reason, you find that obtaining a traditional car loan is impossible for you at this point, don't give up. In most areas, there are dealers who specialize in Buy Here - Pay Here,' which means there is no credit check and you will be approved if you can come up with the required down payment. In most cases, these are previously owned cars and the down payments range from $500.00 to $3,000.00. Payments vary and may be required on a weekly or monthly basis.

The information contained in this article is designed to be used for reference purposes only. It should not be used as, in place of or in conjunction with professional financial advice relating to the car loans, interest rates, credit reports or the auto loan industry as a whole. For additional information on auto loans, check with a lender who specializes in these types of loans.