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We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

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What is a buy rate for an auto loan?

Answer:

A buy rate is the interest rate that a potential lender quotes to your dealer when you apply for dealer-arranged financing

Your dealer may offer you an interest rate that is higher than the buy rate. The rate the dealer offers you is called the “contract rate.” Sometimes the lender pays the dealer a fee for arranging the financing that is based on the difference between these two rates. Dealers may have discretion to charge you more than the buy rate, so you may be able to negotiate that interest rate.

Ask the dealer if you qualify for a loan with better terms. In general, dealers and lenders are not required to offer the best rates available. You can save money over the life of the loan by getting quotes from multiple lenders, comparing offers, and negotiating for the best interest rate available to you. This could save you hundreds or thousands of dollars over the life of the loan.

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