At Grace Auto Group, we want to be here for our friends near the Morrisville, Bristol, and Levittown, PA, areas, through every step of the car-buying process. We know that many questions pop up when it comes to financing, so we’ve put together this helpful guide to interest rates on used cars.
If you’re looking at interest rates on an auto loan, you may be wondering what determines your specific rate. While there are many factors at play when it comes to financing a used car, it all comes down to your credit score.
A credit score is a numeric symbol on a scale from 300 to 850 based on your likeliness to repay any debts. When you assume debt of any kind, such as a mortgage, car loan, medical bill, or credit card loan, your credit score will move up or down depending on how you pay off the debt.
For example, if you always pay your mortgage on time, you may have a higher credit score than someone who has not paid their student loan in three months.
The scores are assessed on the following scale, and the higher the score, the more likely you are to receive a lower interest rate:
So, what should you do if you want a lower interest rate on a used car? A quick way to do this is to find a cosigner. This should be a trusted member of your family with a higher credit score than yours. They are promising to pay any debts you do not pay on time, which can help you secure a better rate.
Another way to lower your rate that may take more time is to improve your credit score.
Tips to Improve Your Credit Score
The following are some ways you can improve your credit score. Keep in mind this takes time, so you’ll want to start on these steps before it’s time to secure an auto loan.
Now that you’ve read our guide to interest rates on used cars, you’re ready to get started on your car-buying journey. Stop by Grace Auto Group today to see our vast selection of pre-owned vehicles.
We look forward to seeing our neighbors throughout the areas of Morrisville, Bristol, and Levittown, Pennsylvania, soon!