Car Financing Basics
Okay, so you've found the perfect car. Before you even think about purchasing it, you need to know how you're going to pay for it. If, by some miracle in today's economy, you have saved enough to pay for the entire car, you will not need financing.
But most car buyers today make their purchase by paying a down payment and then financing the balance -- making monthly car payments until the remainder of the loan is paid in full.
Remember, that financing is a loan and as with all loans, you have to pay interest. Unless you don't mind paying thousands of dollars in interest, you'll want to make your down payment as high as you can afford. The low Annual Percentage Rates (APR) that dealerships and car companies advertise on television are the interest rates the dealer charges for financing. Often, those low rates are only for people with perfect credit or they are an introductory rate, meaning they will go up after a certain period of time.
If you know you have to finance the car, you need to shop around for the best interest rate. If you meet the qualifications set out by the car dealer -- perhaps you're a first-time car buyer, or you have excellent credit -- you may want to consider going through their finance department. Just make sure you read the fine print. An APR of 1.9% sounds great until you realize that is for the first year only. You want a low rate for the entire period of your loan.
At JSC Federal Credit Union, you may find some of the most competitive rates. A great deal is to get the best price on the car as well as the best possible financing rate. Click here to learn more about energY auto loan solutions...
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