With Phoenix auto loan rates still at historical lows, prospective car buyers have a chance to affordably finance their vehicles. Unfortunately, it's not as simple as picking a low rate and driving your dream car off the lot — you need to shop around and find a rate and financing term that's right for you.
Deer Valley Credit Union sat down with us to answer some commonly asked questions about Phoenix auto loan rates and the
car-buying process.
Phoenix Banking Rates: How do Phoenix auto loan rates compare to the rest of the U.S.?
Deer Valley Credit Union: They're comparable to what you would find in other cities.
PBR: What is the ideal auto loan term length? Is it possible to finance a vehicle for too long?
DVCU: An ideal auto loan term length is 48 to 60 months maximum. Yes, longer terms can out-live the vehicle.
PBR: How does Deer Valley Credit Union determine the auto loan rates it offers to members?
DVCU: Our asset and liability committee recommends a rate, then our board approves it.
PBR: What can borrowers do to reduce the interest rate on their existing Phoenix auto loans?
DVCU: A borrower can refinance at a lower rate, with a shorter term or opt into a cash-back offer.
PBR: What are three steps an auto loan applicant in Phoenix can do to ensure he's offered the lowest possible rates when shopping for a new auto loan?
DVCU: An auto loan applicant can work to raise his FICO score, reduce other debt or apply jointly with another person.
PBR: Are there vehicle characteristics, such as model or year, that can affect auto loan rates?
DVCU: Later models have greater loan-to-value ratios.
PBR: What is the difference between financing a new car and a used car?
DVCU: Loan-to-value rations are usually quite different based on the age of a car and the amount it has been driven.
PBR: How many times can a person in Phoenix refinance his auto loan?
DVCU: Is there a disadvantage to multiple refinances? As long as closing costs are at a minimum, refinancing can be a good idea, no matter how many times.
PBR: What are the advantages and disadvantages of paying off an auto loan early?
DVCU: None, as long as there is no prepayment penalty.
PBR: What are some questions auto loan applicants should ask to ensure they're receiving the best deal?
DVCU: Auto loan applicants should get preapproved and see if anywhere else is offering better rates.
PBR: How much should a person expect to contribute toward an auto loan down payment?
DVCU: As much as they can afford to contribute.
PBR: How does credit affect the auto loan rate an applicant is offered?
DVCU: Credit affects auto loan rates offered a lot. Rates are based largely on an applicant's FICO score.
