How a loan works Bensalem PA

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

Sloane Honda
215-305-5000
9903 Bustleton Ave
Philadelphia, PA
Bensalem Auto Sales Inc
(215) 633-6400
2608 Bristol Pike
Bensalem, PA
Faulkner Toyota Inc
(215) 244-9300
RR 1
Bensalem, PA
Elias Auto Sales
(610) 791-4343
1034 W Emaus Ave
Allentown, PA
Dani's Auto Sales Inc
(215) 333-5520
6200 Harbison Ave
Philadelphia, PA
Breon-Confair Ford Lincoln Mercury
(570) 398-2330
9604 S Route 220 Hwy
Jersey Shore, PA
Glenbrook Auto Sales
(610) 863-5393
6510 Sullivan Trl
Wind Gap, PA
Coolbaugh Auto Sales
(570) 265-2776
Towanda, PA
Designed Imports Inc
(215) 345-9460
Rts 313 & 611
Doylestown, PA
Piazza Honda of Philadelphia
(215) 492-1115
6935 Essington Ave
Philadelphia, PA

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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.

Featured Local Company

Sloane Honda

215-305-5000
9903 Bustleton Ave
Philadelphia, PA


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