Here are 3 ways that you can the best interest rate for your car loan:

Shop Around

Just like you might find a different price for a car at a different dealership, you will find a different interest rate at each different lending institution that you visit. For example, a bank may give you an interest rate of 6 percent if you have a history with them, while a car dealership might give you a 5.5 percent interest rate if they really want to make a sale. Therefore, be sure to ask several different sources what their interest rate would be for the same loan amount.

Note: be sure that when you compare interest rates, you are comparing the same type of interest. For example, a fixed interest rate is a rate that will stay the same until you have completely paid off the loan. However, an adjustable interest rate may change with the economy. The adjustable rate could increase or decrease, but it is not ensured to be the same for the entire time that you have the loan.

Negotiate

Always negotiate for the interest rate. Every lending institution wants your business, as long as you have a good credit history and are committed to paying off the loan. Therefore, you will have some wiggle room when it comes to negotiating for the best interest rate. You may not be able to reduce the interest rate by a whole point, but every little fraction of a point helps when it comes to being able to afford your car loan.

Improve Your Credit Score

If you are finding that you just can't get a car loan at the interest rate that you want, then it's time to focus on improving your credit score. In order to improve your credit score, pay off any credit cards that you currently have balances on and close any unused accounts. Because lenders will look at the balance on your credit cards from about six weeks prior, it's a good idea to wait six weeks before accumulating a balance on those cards again.

Improving your credit score may take time, so start early if you think you will need to take out an auto loan any time soon.

Remember: when it comes to getting the best interest rate on your car loan, research, patience, and negotiation tactics can mean the difference in thousands of dollars. Plan a budget before each visit with a lender in order to ensure that you do not agree upon an interest rate that you cannot afford. Your auto loan payments will be easy to afford when you have the right interest rate and dedication towards paying the loan off on time.