Dealership financing is convenient, but it's rarely the cheapest option — dealers often mark up the rate they get from a lender. Getting your own financing lined up first puts you in a much stronger negotiating position.

Get pre-approved before you visit a dealer

A pre-approval from your bank, credit union, or an online lender gives you a real interest rate and loan amount to compare against whatever the dealership offers. If the dealer can beat it, great — if not, you already have financing in hand.

Rate shopping has a built-in grace period

Credit scoring models typically treat multiple auto loan inquiries made within a short window (often 14–45 days depending on the model) as a single inquiry, so comparing several lenders won't multiply the credit score impact.

What affects the rate you're offered

  • Your credit score and credit history length.
  • The loan term — shorter terms usually come with lower rates.
  • New vs. used vehicle, since used car loans often carry higher rates.
  • Your debt-to-income ratio and down payment size.