How to Get Lower Interest Rates on Loans

I recently went to go buy a car, and after walking around the lot for a bit, I ended up picking a Toyota highlander which was $15,000.  Before I went shopping I told myself that I was not going to buy a car unless I could get a very low interest rate like between 1-3%.  When the salesperson and I went in side to haggle over the price, I told him about the interest rate I wanted.  He just blew it off and focused on how much of a monthly payment I would have (they always do this) and that the interest rate would be 11%. 

I told him, “I don’t care how much I am paying a month, I want a low interest rate.”  He still didn’t get me.  Then the manager came over, and I explained to him, I will only buy the car if I get a low interest rate. The manager said he could proably get me 7%, and I told him not good enough.  He then ran my credit, and said it was great and offered my 3.5%.  over 5 years.

I said, “still not good enough, I will take 2%,” and he said no.  At this point I was at the dealership for about 4 hours, and the manager we were all starting to get tired.  “I’ll buy the car if we can secure a 2.5% interest rate over 72 months, 2 grand down,” I said, and the manager took the deal. I now have a Toyota highlander.

Why I wanted a lower rate

This is how much interest I would have paid over the 5 years at 11% interest:      $3959.16.

Here is 5 years is at 7%:         $2444.92 in interest.

Here is 5 year is at 3.5:                       $1189.59 in interest.

Here is what I got: 7 years at 2.5%:   $1184.14 in interest.

So by haggleing the interest rate down from 3.5% to 2.5%, I gave myself a monthly payment of $168.86 and I pay about $5 total less in interest and I get two more years to pay it off. Therefore this is what I learned and it applies to all aspects of getting loans:

1. You are the consumer and you have the power to get what you want.
2. That power is called the free market, because you can always go somewhere else or walk away.
3. You have a reason to get a lower interest rate because not only will the monthly payments be less but you will be paying less in total so USE THAT REASON.
4. They are a business, and they want your business, even if it means making less money.
5. The lower the interest rate, the closer you are to borrowing getting free money.

Conclusion

SO ASK FOR A LOWER INTEREST RATE, it is worth it. Read Restructureing Interest to learn how to save money using your lower interest rates.