Drive into Savings: How Credit Makes a Difference in Car Buying

Women grabbing keys in car

Key Takeaways

Unless you’re in one of the few walkable cities in the US, chances are you need a car to get around. Purchasing a car can be a daunting process, especially when it comes to getting the right car loan.

In this financial toolkit, we’ll explore how credit can make a difference in car buying, highlighting smart car buying strategies and ways you can secure the best car loan possible.

Credit basics for car buying

When you’re thinking about buying a car, your credit score is like a report card that lenders use to decide how much money to lend you and the rules for paying it back.

If your credit score is not so great, you might face some challenges. It could mean you don’t qualify for the car you want, or you might have to pay a lot of money upfront. Neither of these situations is great, especially if you’re in a rush to get a car.

But here’s the thing — your credit score also has a say in how much interest you pay relative to market conditions and what your monthly payments look like. Let’s say your credit score is in the low 600s; that tells the lender you’ve had some trouble repaying loans before. So, to cover the risk, they might decide to charge you more interest. Instead of a 4% interest rate, you could end up paying 6%. On a $30,000 loan over 5 years, that’s an extra $30 every month, adding up to $1,800 more over the whole loan.

But don’t worry! You’ve got a power move – increasing your credit score before you go car shopping. There are tools made specifically to help you improve your credit score, like:

  • MyAutoLoan: Streamline your auto financing search with MyAutoLoan’s wide range of quick and easy options.
  • Gravity Lending: Unlock saving possibilities with Gravity Lending – lower payments or reduce interest hassle-free.

By working on your credit, you’re not just saving money; you’re making your whole car-buying journey way smoother.

Strategies for smart car buying

Alright, let’s talk about the dollars and cents when it comes to getting a car loan. It’s not just about qualifying for a loan; it’s about making sure you’re spending what you can actually afford.

Just because a lender says you can borrow a certain amount doesn’t mean that’s what you should splash out on. Here’s the deal — many lenders figure out your pre-approval amount based on your credit and how much you earn before deductions like taxes and health insurance.

If you don’t consider all your other expenses, you might end up with an auto loan that’s way out of your budget. That not only increases the risk of missing payments but could also hurt your credit score. So, before you start checking out cars, take a good look at your money situation.

It’s a smart move to track your spending for a month or two to understand what you can comfortably afford. When budgeting for a car, remember there’s more than just the car note to consider. To get the full financial picture, add up the cost of car insurance, gas, and maintenance. Jerry’s free AllCar™ app is the best one-stop shop for you to compare car insurance policies, refinance your car loan, and estimate and keep track of repair costs.

Once you have your new ride the Upside app can help you earn cashback at the gas station. You’ll get 25 cents off per gallon the first time you fill up your tank with the Upside app using code STELLARFI25. Gas gets expensive, don’t miss out on free money back.

Getting the best car loan with good credit

Now, let’s talk about the grand finale – closing the deal. It’s the exciting part, but here’s a tip: don’t skip the negotiation stage.

Salespeople often have room to maneuver on the price and terms. Ever thought about putting down an extra $1,000 to score a lower interest rate? Or how about negotiating for perks like a maintenance contract or free oil changes? Don’t be shy about asking your salesperson to sweeten the deal. Remember, they want to close the deal just as much as you do.

Stellar tip: Don’t wait until you’re at the dealership to lock in your financing. While the dealership’s finance company might seem like the easiest option, their interest rates are often higher.

Take control by getting pre-qualified for a loan from a separate lender before you even step foot in the dealership. This will give you a clear picture of your spending power, monthly payments, and interest rate before you start negotiating on a car.

Remember, most dealerships are happy to work with outside financing, so you’re not locked into their options. By being prepared with your own financing, you’ll be in a much stronger position to negotiate a fair deal and avoid getting stuck with high-interest debt.

You can get four loan offers from myAutoLoan in a matter of minutes for free. There are no fees and no obligation to use one of their lenders or loans.

If you already have a car but want a lower monthly payment, Gravity Lending’s got you with their custom, no-fee, low interest rate refinancing options.


To get a good car loan, it’s crucial to have good credit. Buying a car doesn’t have to stress you out if you’re well-prepared. Understand your credit, do your homework on different cars, and check out interest rates.

Smart money moves come from knowing what you can spend and taking the time to get the best deal through negotiations. If you want tips on boosting your credit, take a look at what StellarFi has to offer. They’ve got the lowdown on making your financial journey smoother.

StellarFi (StellarFinance, Inc.) and its affiliates do not provide financial, tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own financial, tax, legal, and accounting advisors before engaging in any transaction. StellarFi receives a referral fee from the partners mentioned in this article.