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Can I negotiate a car loan interest rate with the dealer?

Yes, just like the price of the vehicle, the interest rate is negotiable. Dealers may not offer you the lowest rate that you qualify for. To get the best interest rate, shop around with multiple lenders and negotiate.

There are a number of ways you can get or finance an auto loan, including going directly to a bank, credit union, or finance company, or going through your dealer.

If you choose to arrange your financing through your dealer, they will collect your information and send that information to one or more lenders, who will propose an interest rate to the dealer. This is known as the “buy rate.” The dealer will choose the offer to present to you, but they may have an incentive to charge you more than the proposed buy rate. This means that the interest rate you receive through a dealership is generally higher, but you can negotiate this rate, along with other loan terms.

How to get the lowest interest rate for your car loan

Getting preapprovals from multiple banks, credit unions or other lenders – before you walk into a dealership – allows you to shop around and compare interest rates and loan terms to find one that best fits your budget.

Since dealers and lenders are not generally required to offer you the best rates available, negotiating can also help save you hundreds or thousands of dollars over the life of the loan. Negotiating can be as simple as asking the dealer if those are the best loan terms they can offer you or by pointing out lower rates available at a competing lender.

Know what is negotiable

Did you know that you can negotiate the terms of your auto loan? Negotiating can save you hundreds or even thousands of dollars over the life of your loan.

Find out more about auto loan negotiation