How a loan works Allegan MI

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

R & M Auto Sales
(269) 686-1335
1297 Lincoln Rd
Allegan, MI
Grand Allegan
(269) 673-2111
1255 Lincoln Rd
Allegan, MI
Nester Don Chevrolet-Oldsmobile-Geo Inc
(989) 275-5105
424 E Federal Hwy
Roscommon, MI
Northwestern Dodge Inc
(248) 399-6700
10500 W 8 Mile Rd
Ferndale, MI
Express Equipment
(616) 394-9533
1883 M 40
Holland, MI
Grand Auto Sales
(313) 541-1400
21101 W 8 Mile Rd
Detroit, MI
Jim Waldron Pontiac Buick GMC Trucks Inc
(810) 653-1000
1146 S State Rd
Davison, MI
South Kent Sales
(616) 877-4435
4518 Division St
Wayland, MI
J C Quality Motors
(734) 457-0100
15407 S Monroe
Monroe, MI
Riverside Pontiac Buick GMC Trucks Inc
(989) 725-8106
2010 E M 21
Owosso, MI

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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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- Auto Leasing Pros and Cons Allegan MI
- Used Car Loans Allegan MI
- Credit Score and Buying a Car Allegan MI
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