Many automakers offer options to lock in interest rates for new cars that aren't in stock. There's a variety of rate lock programs out there for when you can't find that new car you're looking for on a dealer's lot.
Rate Lock Options Vary
Traditional rate lock programs from automakers such as BMW, help buyers to seal in low APR rates when making custom orders. Right now, amid vehicle shortages, buyers are being encouraged to place custom orders to get the car they want. A rate lock can act as an incentive in exchange for waiting a few months for your car to come in.
Some automakers, like Ford, offer buyers a choice between the rates and deals available at the time of purchase, or at the time of delivery. Other manufacturers offer refunded differences in price if there's a better deal at the time of delivery.
As with most programs specific to certain manufacturers, it's important to do your research, as exclusions may apply and not all manufacturers offer services that can lock your interest rate. Additionally, these kinds of rate lock options are typically only available for borrowers who are buying new, and usually, this means having good credit.
Your Credit and Your Interest Rate
Interest rates are based on many things, but the #1 thing they're based on is your credit score. Typically, the better your credit, the lower the interest rate you qualify for. According to the Experian State of the Automotive Market report for Q3 2021, the average interest rates are:
- Super prime: 2.58%
- Prime: 3.64%
- Near prime: 6.32%
- Subprime: 9.92%
- Deep subprime: 12.99%
All rates have dropped in the last quarter, except the prime and super prime credit tiers, which have risen slightly, 0.02% and 0.10%, respectively.
If your credit isn't in the top tier, you can still get the financing you're looking for if you work with the right lenders, however, you can expect higher interest rates than borrowers with better credit scores. This may mean a rate lock could be a real savings point if there are specials that you qualify for. Be sure to check with your dealer for the options available to you at the time of purchase.
Need Help Finding a Lender?
Here at The Car Connection, we want to help you find the auto loan you need. When you're struggling with credit issues it can be hard to find the right lender for the job, but we know where to look. Let us connect you with the local dealership that can work with your credit situation. Simply fill out our fast, free, car loan request form and we'll get right to work for you.