Types

• Lender rates vary. If you are purchasing a new car, go the manufacturer's website or call a local dealer to determine rate incentives for a new car purchase. Some are as low as zero percent. Local credit unions offer aggressive rates that are hard to beat. If you are military, check with the United Services Automobile Association or Navy Federal Credit Union. Local lenders are other options, and you can call to ask about rates. Subprime lenders can charge as much as 29 percent for a loan.
  
  

Considerations

• Apply to a lender that you determined to have competitive rates (a credit union is ideal). You may not be approved for the best rate, and you should determine what tier you are in for proper comparisons. A tier is your level of risk, and you have to be approved at an A tier for best rates. If you are approved for a slightly higher rate than you saw advertised, you can assume others will approve you above the best rate, as well. Manufacturer incentives, such as zero percent, require good to excellent credit. The rate is not based on tiers; either you are approved for the rate or you're not.
  
  

Misconceptions

• While comparing rates, many people assume that they will receive a great rate because of credit score alone. This is not true. While few banks will provide the best rate based on credit score alone, many lenders determine risk by reviewing your time at your job, at your address and by your current revolving account balances and debt. If you are trying to get a third car loan, you many not be approved at all or for a good rate even with a good score. Obtain a copy of your credit report to make sure your information is up to date and accurate.