Finding the Right Car is Half the Battle

Kenneth C. Wanek is president and chief executive of RateNet

Shopping for a car loan is not like shopping for a car. Any dealer will happily sell you a car or a truck, but not every bank will finance it.

Finding the right loan depends primarily on two factors: your credit-worthiness and the lender's objective.

Credit risk is a rating based on credit-worthiness and ability to repay the loan. While bad credit does not mean you won't find a lender, it might mean you will pay a high interest rate.

The lender's objective is to make money "selling" loans. Some do it with high volume and low rates. Some prefer to work with existing customers and offer them their best deals. Finding the right lender can save you thousands of dollars. Of 31 institutions surveyed Monday in the Los Angeles area, the low rate for a 48-month new-car loan was 5.5%, the high 13.5%. The difference: $2,383.58 in interest over the four-year term.

Here are some tips for finding a good deal on a car loan:

* Find an institution with a good reputation and competitive rates.

* Don't assume that the bigger the bank, the better the rate. Community banks and credit unions often offer better rates and more personal service.

* Maintain banking relationships. Get to know your bankers and let them know you. Often a loan officer will offer a better deal if you are an existing customer or have a good credit rating.

* Shop around. Financial institutions frequently offer specials, or "teaser" rates.

* Watch out for low-interest loans offered by dealers and manufacturers. Often, you'll do better to take a cash-back offer and find low financing elsewhere.


Kenneth C. Wanek is president and chief executive of RateNet, which updates more than 100,000 interest rates weekly for 11,000 banks and credit unions nationwide. The top 10 rates and quality rankings for local institutions can be found at no cost at


Best Auto Loan Rates

Best rates for a 60-month loan from Southland banks only.


Rank APR* Institution Phone National rank** 1 9.00 Cathay Bank (213) 625-4700 59 1 9.00 Western Bank (310) 917-6531 59 2 9.25 Santa Monica Bank (310) 394-9611 70 2 9.25 Western Financial (714) 727-1100 70 2 9.25 Bank of America (800) 843-2632 70 3 9.50 Provident (909) 686-6060 82 4 10.50 Wells Fargo (213) 253-3000 99 5 11.00 City National Bank (909) 276-8800 103 5 11.00 Far East National Bank (213) 687-1200 103 6 11.50 Great Western (800) 543-2987 106


* Annual percentage rate*

** For all financial institutions in Rate.Net's database

All rates are current within the last seven days and are subject to change at any time.All rates and terms subject to credit-worthiness.

Reproduced with permission of Rate.Net. All rights reserved. Rate.Net is a product of DataTrac Corp.Copyright 1998

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