How a loan works Coldwater 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

Cole Story Ford Lincoln-Mercury
(517) 278-5661
410 E Chicago St
Coldwater, MI
Royal Chevrolet Cadillac Inc
(517) 279-8061
637 E Chicago Rd
Coldwater, MI
Bobilya Chrysler Dodge Jeep
(517) 278-5623
144 E Chicago Rd
Coldwater, MI
Cbr Auto Sales
(517) 369-4282
388 W Chicago Rd
Coldwater, MI
Fast Lane Auto Sales
(517) 278-2359
680 E Chicago Rd
Coldwater, MI
B & K Auto Sales & Leasing
(517) 278-1908
736 Kasey Ln
Coldwater, MI
Jay's Pontiac-Buick-GMC Truck
(517) 278-2381
595 W Chicago St
Coldwater, MI
Peterson & Son Lincoln-Mercury
(810) 664-4511
48 W Genesee St
Lapeer, MI
Kelly Automotive Group Inc
(517) 676-9311
495 Cedar St
Mason, MI
Ralph Thayer Toyota
(734) 242-3900
14975 S Dixie Hwy
Monroe, 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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