Auto Finance Dealership Rates Demystified

Many people who do not know much about how auto finance works think that all lenders have the same rates. While a growing number of people are slowly becoming aware of the fact that auto finance interest rates are not standard many still think that they are better of visiting their nearest bank or car dealership is the best idea. In order to understand how some companies are able to offer cheaper interest rates than others it is important to understand what you are getting.

The US government regulates interest rates by posting its official rate which changes depending on our fiscal policies. However this rate is something which is the lowest that any lender can go, there are no auto finance companies which can go any lower than this official rate but there is virtually no boundary they cannot cross when increasing their interest rates. Auto finance companies offering low interest rates are often ones which are offering interest rates which are pretty close to the official rate. They are able to do this because they cut costs and pass on the savings to their clients.

If you are searching for the cheapest auto finance companies you should search online. Purely online companies have the lowest overhead to deal with and so their auto finance interest rates are rock bottom. But because they are very competitive they also offer quick communication and blazing fast auto finance processing times.

However if you are searching for an auto finance company online it is very important that you filter out companies which are offline i.e. offline companies or car dealerships with websites. These companies can be sometimes misleading and people can end up thinking that they are getting cheap auto finance interest rates when in fact they are paying more. However there is no law against getting a quote from them and comparing it with quotes you get from other companies.

 

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