How a loan works Alice TX

When you purchase a vehicle with a loan, a bank or other financial institution pays for most or all of the vehicle up-front, and you agree to pay back the money over time.

Local Companies

Bowden Ford-Lincoln-Mercury Inc
(361) 664-9541
1300 E Main St
Alice, TX
Bradford's Motor Cars
(361) 883-1430
2250 E Main St
Alice, TX
Bowden A-1 Used Cars
(361) 664-9541
1300 E Main St
Alice, TX
Love Chrysler Dodge Jeep Llc
(361) 664-9955
1259 E Main St
Alice, TX
Easy Credit Auto Sales
(361) 664-1166
2524 Old Kingsville Rd
Alice, TX
Bowden Ford-Lincoln-Mercury Inc
(361) 883-7511
1300 E Main St
Alice, TX
Payne Weslaco Ford-Mercury
(956) 968-3151
800 E Expressway 83
Weslaco, TX
Bobby's Auto Sales
(432) 580-7611
101 N Dixie Blvd
Odessa, TX
Allen Samuels Auto Group
(713) 343-8000
1515 S Loop W
Houston, TX
Munoz Auto Sales
(281) 931-0229
8902 Airline Dr
Houston, TX

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2007 Volvo XC70
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Understanding Loans



When you purchase a vehicle with a loan, a bank or other financial institution pays for most or all of the vehicle up-front, and you agree to pay back the money over time. The amount of money you borrow from the bank is referred to as the "principal." The amount of money you contribute up-front is referred to as the "down payment" and usually varies from 10% to 20% of the purchase price of the vehicle. You can often purchase a new car without a down payment (if you qualify); used vehicles generally require a 20% or more down payment.



The payback period for a loan is typically up to five years, although some newer vehicles are being sold with longer-term loans. The financial institution will charge you "interest" for your use of their money. Interest rates vary depending on a number of factors such as your credit rating and where you live. Currently, new car loan rates start at around 8.5%, with used car rates about a percentage point higher. Manufacturers frequently offer lower loan rates as a purchasing incentive, but sometimes these are attached to conditions that may not work for you. Make sure you ask enough questions to make yourself comfortable when investigating various loan options.



 




Key features of loans




The primary features of loans are summarized below. Make sure you review our articles on leases and the differences between loans and leases before making a final decision.



 




  • You have ownership and equity in the vehicle. Your monthly payments are working to purchase that car and it's yours to sell or keep as long as you wish.



  • Gives you control over your vehicle.
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- Credit Score and Buying a Car Alice TX
Check your credit report and know your credit score before you buy a car. If you're planning on financing your car with an auto loan, it's useful to know your credit score so you get the best interest rate.
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- Lowering Auto Finance Costs Alice TX
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