How It Works

Learn more about Washington car loans here. We’ll explain the different types of vehicle financing and how each method works.

Interest Rate Information

Before we discuss Washington car loans and the other financing options available, it’s important to mention interest rates. The interest rate of your loan can mean the difference between buying the car of your dreams and settling for something less. During times of rising interest rates, fixed-rate Washington car loans are usually your best bet. However, not all fixed-rate loans will come with comparable rates. For example, homeowners might consider home equity Washington car loans. On the other hand, you can also select a variable-rate loan. These loans are more difficult to find, but they can save you money in times of declining interest rates. Examine how to save money on car loans.

Dealer Financing

If you choose to get Washington car loans through the dealership, your interest rate will likely be fixed and linked to the rates established by government securities called T-bills. Rising rates will increase your monthly payments, and falling rates will do the opposite. Keep in mind that dealerships that provide financial services usually mark up the interest rates of the loans substantially.

Pre-Qualified Loans

One way to get excellent rates on Washington car loans is to apply for the loan before you begin car shopping. When you pre-qualify, you lock in a fixed interest rate, so you are protected if interest rates rise while you’re shopping for your new vehicle. Pre-qualifying for Washington car loans also gives you the upper hand in negotiations with the dealer because you already have the financing aspect worked out.

Home Equity Loans

You may also consider home equity Washington car loans. These loans use the equity you have in your home, which is the appraised value of the home less the outstanding balance on your mortgage, to finance your vehicle. Home equity Washington car loans typically have very low rates and can save you hundreds of dollars per year on interest expense over traditional loans. However, you have to keep in mind that your car loan is secured against your home, which could be put in jeopardy if you fall behind on payments.