When someone says they have the cheapest car loans, what do they mean? What is a cheap car loan? Are they saying that their monthly payments are the lowest? For me, the cheapest car loans can mean only one thing and that is that the auto loan that’s being touted as the cheapest has one of the lowest auto loan rates that are available. By far the most important consideration in depending if you have a “good” auto loan versus and expensive auto loan is the interest rate.

Auto loan rates play a huge part in determining if you have made a cost effective purchase of a new or used car. The combination of the auto finance and the purchase price are what buying a car is all about. At the end of the day, many people leave more money on the table through not negotiating good auto loan rates than anything else. You can’t forget for a minute that most auto dealers work on a business model where they make as money for their dealership through their financing activities as they do from the sale of the automobiles.

Another important point to remember when looking for the cheap car loans is your credit. At the end of the day it’s your credit that’s the determining factor in your auto loan rates which in turn is probably the most important single cost in the overall transaction. I’m sure there are studies that show that those with better credit also get a better price on the car. This is because the dealers know that people with good credit and go almost anywhere to buy a car. For this reason alone, they offer the best price to the customer that they can. One way to combat this problem is to get your financing arranged before you go to the dealership and let them know you have your auto financing. This gives you about the same advantage as someone with very good or excellent credit.