There are a few ways to secure a loan discount on your car. It all depends on the type of lender you want and the amount of security you can offer.
Loans through dealers.
Financing your loan through a dealer means you have more control over negotiating your repayment rate. Your lender has to also comply with the Consumer Guarantees Act, which means they have to sort out any problems on their end, such as bankruptcy of the company.
Loans through banks.
Banks will usually offer cheaper interest rate alternatives, provided you can give something in return, such as a mortgage extension. Banks may also work out better for you if you want to pay lower interest over a more extended period. However, getting a loan through any lender or bank will require a healthy credit report to prove your ability to meet repayments.
Consider package deals.
Some banks offer discounts on their interest rates if you use them for other services.
So if you've got a mortgage, credit card, or savings account with a bank, you might want to ask them first if they can offer you a discount on your car loan.
Guarantors and security.
Your guarantor or security loan is like an extra layer of assurance for your lender, allowing them to lower the interest rate you'll pay. That's because you're offering something to repay your loan if you can't meet the terms of your agreement.
A guarantor loan could be through a bank or other lender, which your car lender can contact for repayment if you don't meet your repayments.
Security loans are standard for a larger car or home loan. The vehicle itself acts as a guarantee against non-repayment and can be repossessed or sold to meet the amount you owe.
Having a guarantor or security clause on your loan can be a way to reduce your interest repayments and gain loan approval for those with lower credit scores. Talk to your lender about their options and what's expected of you before you apply.