If you are like the majority of car shoppers, you’re probably planning on paying for your next car by taking out a loan. While it can be a straightforward process, there are a few things you should know about how car loans work before you get started. There are three main factors that are used to determine how much you will end up paying.
- Down payment: The amount you have for a down payment or the value of your trade-in can greatly reduce the total amount you need to borrow.
- Interest Rate: This is the amount you will be charged to borrow money. It is expressed as a percentage. The lower this number is, the less it will cost you to take out a loan in the long run.
- Loan Term: The term of the loan is how long you have to pay it back. It can range from as short as 12 months to as long as 72.
With these three factors in mind, you can make an informed decision about whether or not the loan you are offered is a good deal. You might be drawn in by a low monthly payment, but then see that you have a high interest rate or a longer loan term, both of which will cost you more in the long run.
A simple way to ensure you are getting a good deal on your next car loan is by financing directly through your dealership. Here at Ginn Chevrolet, our finance department will work hard to compare lenders to get you the best deal possible.
If you’re ready to start the financing process or just have a few more questions, swing by Ginn Chevrolet, and we’ll help you in every way we can.