While there are maximum interest rates for auto loans allowed by law, they vary state by state. Even the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 did not make car loans something that the federal government regulates. Though the Senate wanted the weight of the law on the back of car dealerships, the House of Representatives’ wish was for car dealers to get an exemption, and it was the latter group’s version of the bill that eventually passed.
Staying Under The Maximum Interest Rate
Now, with all of that being said, you need to know that there are steps you can take to keep your car loan’s interest rate as low as possible. The first thing you ought to do, if you can, is pay cash for your new car. Of course, this is not a possibility for many, so the next best option is for you to get financing through your bank or credit union before you start shopping. In most cases, the interest rates you get from your bank or credit union will be lower than those offered by car dealerships, with the exception of special deals offered from time to time for buyers with stellar credit.
We can help you secure a fair interest rate on a car loan through our extensive network of lenders and dealers. Apply today, and we’ll match you to a lender based on your location, income, and other factors. This helps ensure that you work with a lender that fits you best, thereby minimizing your interest rate.
Usury Laws and Your State Attorney General’s Office
If you are not able to get a loan from your credit union or bank or find special financing from a dealer, you will need to check with your state’s attorney general’s office to learn what the top interest rate your state’s usury law permits before you hit the car lots. “Buy here pay here” and “no credit check” lots are notorious for charging exorbitant rates. Regardless of how poor your credit score may be, it is illegal for a car dealership to charge you an interest rate higher than what your state’s usury law allows.