On Your Side: Saving on auto loans
With used and new car prices still soaring, it can be difficult to get a good deal in this market.
You may have to pay above manufacturer's suggested retail price (MSRP) for your car -- but you can save thousands by shopping around for your auto loan.
LendingTree found that the average car buyer can save an average of more than $5,000 by choosing the offer with the lowest annual percentage rate (APR) over the one with the highest, which is often what you'll get if you don't shop around and simply finance your loan at the dealership.
The average highest APR back in January was 13.82 percent. The lowest was 8.98 percent.
"And also getting that pre-approval before you go into the dealership gives you a little bit of leverage, too, because it may be in the dealer's interest -- if they really want you to finance through them -- to cut a little bit off the price of that car," said LendingTree Chief Credit Analyst Matt Schulz.
If you have good credit, that will also save you cash. Those with credit scores of at least 720 could save an average of more than $6,000 over the life of the loan, according to LendingTree.
The average APR for someone with a subprime credit score is 17.48 percent. Compare that to 6.13 percent for someone with a super-prime credit score. That's an 11-point difference.
If your credit needs work, consider asking a family member with good credit to co-sign on the loan.
To view the full results from the auto loans study by LendingTree, click here.
