When it comes to buying a new car, many people assume that if they have a lower credit score that their interest rates will be through the roof. Having a good or excellent credit score can provide a lot of opportunities for better loans and interest rates, but building or repairing credit takes time. Financing a car loan doesn’t have to mean getting an astronomical interest rate with high monthly payments just because you don’t have the best credit score. There are some tips and tricks to help you get the best deal despite your credit score — and financing can even help you build your credit score up along the way.

Skip the dealership financing

There are so many reasons a person’s credit score might be low, and even though the reasons could be out of their control, that number still affects us. Just because your credit score affects your loan rates doesn’t mean you have to get an unaffordable or unreasonable loan. The price that you get can be affected by more than your credit score, and there is a way that you can use that fact to your advantage.

Where you finance your car through is the first factor that affects your auto loan. When you go through your bank or acquire a loan on your own, you are working directly with the financial institution. This can work to your benefit over financing directly through the dealership. While it might be more common to finance through a dealership directly, dealerships often offer higher interest rates. This is because the dealerships get a certain amount of kickback from the financial institution when they bring them customers for car loans, which is often reflected in the provided interest rate.

When all else fails

It isn’t always possible to improve your credit score before applying for car loans, as it can take a lot of time to do so. Car loans are also a way to improve your credit. When you make payments on time, it can help your score grow, and the length of the loan can help establish credit history as well. Financing directly from a dealership doesn’t always mean you’re getting a higher interest rate, and for many people, it’s the more straightforward, more comfortable process to handle. Avoiding the dealership financing department isn’t the only way to get a better auto loan.

While it’s not always possible, providing a more significant downpayment lowers the bank’s risk and can, in turn, lower your monthly payments as well as your interest rate. If all else fails, you can always plan on using your auto loan to help build your credit and then refinance down the road. Just because you have a high rate now doesn’t mean you always will, and because paying on your car loan can help improve your credit, you can use that to help you get a better interest rate when you refinance later on.