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Design Your Own Car Loan

You can save thousands of dollars on your car loan just by planning the loan package carefully.

This page:

Explains how to choose a reasonable loan principal

Helps you find a loan term to save money and fit your budget

Reveals how to secure the lowest car loan rates


Get the lowest auto loan rates:

Capital One Auto Finance offers the lowest auto loan rates in the country, for people with all types of credit ratings.

Apply with Capital One whether you are buying a new or used car, or even if you are buying from an individual. Whatever your choice, you will save thousands.

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If you have poor or no credit, click here to apply for special financing.


Principal amount

If you're still shopping for the perfect car, you probably don't have an exact price yet. Not to worry. With direct financing, you can secure a loan for a given price range, so you've got some flexibility when it comes time to negotiate.

And if you do have a nailed-down price, you still may want some loan limit leeway. Because there will be (of course!) additional charges to factor in.

If you're buying a new car, make sure you've priced options and included delivery fees. (There will be delivery fees even if you buy straight off the lot.)

And, new or used, there will be taxes, license and registration fees, which vary from state to state. These you can wrap into the loan principal if you're buying from a dealer, but not if you're buying from another person.

So give yourself a little breathing room when you decide on a loan amount. With direct financing from an online lender, you'll be qualified (but not required!) to spend up to the loan limit you've chosen. So choose a figure that gives you a little flexibility.

However, if you find you need a higher limit, simply contact the lender via telephone or email, and you'll be re-approved.

Loan term

You'll also need to choose a loan term, which vary from 12 months to 72 months on car loans. The shorter the term, the lower the car loan rate.

But that's not the only advantage to a shorter-term loan. Car loans are amortized so that the payments you make at the beginning of the loan's life go more towards interest than principal. The shorter the loan, the larger the monthly payments, but the lower the total interest bill.

Choosing a term is a trade-off between a low car loan rate and low interest bill on the one hand, and low monthly payments on the other.

Though it's very important to take your monthly payment budget into account when choosing a loan product, don't let it be the deciding factor. Try and strike a balance between manageable monthly debt long-term savings.

Savvy shopper tip: The online direct financers Capital One use consumer-friendly lending practices, so they won't charge pre-payment penalties, the way many dealers do. You can boost your payment size later in the loan's life, and the extra cash will go directly towards decreasing your balance, not towards interest.

Method of payment

You won't find this choice in the traditional world of car loans. But the way you choose to pay your loan can have a nice money-saving bonus if you finance online.

With certain direct-financing companies, you'll be given an option between paying by invoice and paying automatically. The automated payment system works by deducting your monthly payment from a specified account each month.

You don't receive a bill, and you don't have to remember to mail anything in. For choosing this option you can earn a car loan rate an entire point lower than you would normally qualify for.

Ready to search car loan rates and apply? Visit Capital One.

If you need to crunch some numbers, use our car loan calculator.