Many Phoenix drivers are unsure of whether or not they have a good enough credit score to finance a car. What credit score is needed to finance a car? Typically, the better the credit score, the better deal you’ll get on financing. In addition, Tempe dealerships like iAUTOHAUS offer finance options that can help you get behind the wheel of one of our high-quality used luxury cars with a payment plan that will suit your budget. Learn more about what credit score is needed to finance a car, then visit us to explore your options with the experts in our finance center.

Average Credit Score to Finance a Car

The average credit score for drivers who have recently secured an auto loan in and around Scottsdale is about 721 for a new vehicle and 657 for a used car. That being said, it is still possible for drivers to get car finance loans regardless of their credit score. However, you should note that the lower your credit score is, the higher interest you’ll pay. Here’s a quick look at the different categories for credit scores:

• Superprime: 781 to 850
• Prime: 661 to 780
• Non-prime: 601 to 660
• Subprime: 501 to 600
• Deep Subprime: 300 to 500

How to Get Car Financing With a Low Credit Score

So, what credit score is needed to finance a car? The credit score to finance a car depends on what the lender is willing to work with. Here are a few things to keep in mind when looking at our car finance options:

• Focus on Positives: Demonstrating that you’ve made positive financial actions will increase your odds of securing a loan. For instance, if you’ve never missed a credit payment, but your credit score has been marred by business debt, you’ll be in a better position.
• Bring Proof: Bring pay stubs, proof of address, cell phone bills, auto insurance documents, and proof that you’re currently working. Any document that can show you’re responsible and you’re in a position to pay off your car loan despite your credit score will help. 
• Show Collateral: If you own a home or are able to put down a substantial down payment (at least 25%), you will be more likely to qualify for auto financing and get a good interest rate as well.

Discuss Your Financing Options With iAUTOHAUS  

Still wondering what credit score is needed to finance a car? Stop by iAUTOHAUS and sit down with our finance specialists. We can help you apply for financing and determine whether or not a car finance loan is right for you. If you have any questions about the car buying process, contact us online or give us a call at %%di_phone%%. We look forward to putting you behind the wheel of the pre-owned luxury vehicle that is the ideal fit with your Chandler-area lifestyle and budget, so come see us today! 

What Is a Good Interest Rate?

Your credit score and the requested loan amount will influence the interest rate you will be given in and around %%target city 2%%. The lender sets the interest rates, which are not negotiable. While calculating the interest rate (APR), a number of factors are taken into account, including credit history, payment-to-income ratio, debt-to-income ratio, loan-to-value ratio, and the number of existing open auto loans one has. 

As with any financial information, rates are always subject to change based on the current market and financial climate. Check out the estimated interest rates based on credit scores below:

• Credit Score of 740+: 6.15%-8.39% 
• Credit Score of 700-739: 7.25%-10.25%
• Credit Score of 670-699: 7.89%-14.50%
• Credit Score of 640-669: 10.14%-17.94%
• Credit scores: 600-639: 11.50%- 18.99%

Getting a Lower Monthly Payment on an Auto Loan

How can I lower my monthly payment? Can you get a lower interest rate on a car loan? If you want to figure out how to get a lower interest rate on a car loan and/or a lower monthly payment, your best bet is to focus on your credit score and financial situation. Consider the following:

1. Check Your Credit Score: Knowing your current credit score is essential as you embark on your car search. It will help you determine if you are already in a decent position to apply for financing or whether you need to improve your credit rating.
2. Compare Offers: Compare rates and payment terms offered by multiple financial institutions to make the most informed decision and leverage negotiating power. If you don’t secure the best rate right away, you’ll often have the option to refinance down the line, once you’ve improved your credit by making your car payments on time.
3. Extend the Term of the Loan: Many lenders are willing to increase the length of the loan by extending it from 60 months to 84 months. This reduces the monthly payment, which may help many buyers. Keep in mind that while extending the loan reduces the monthly payment, you may pay more in interest over the life of the extended loan.
4. Make a Larger Down Payment: If you are able to afford a larger down payment on your chosen vehicle, you should consider that option. By doing this, you will reduce the amount of money you will need to finance in the long term. This can reduce your monthly payment and the amount of interest you will pay over the life of the loan. 
5. Enlist a Cosigner: Having someone cosign your loan may help you get a lower interest rate on a car loan, especially if you have less-than-stellar credit.

Explore Your Financing Options With iAUTOHAUS

We’re here to answer any questions you may have about how to get a lower interest rate on a car loan. Meanwhile, learn more about the benefits of buying a used luxury car, then browse our current pre-owned vehicle specials to take advantage of some of the best deals in the Chandler area. If you have any questions, please feel free to reach out to our team.