How a loan works El Centro CA

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

Direct Auto Plaza Hyundai
(760) 353-8000
2351 S 4th St
El Centro, CA
El Centro Motors
(760) 352-8030
1540 Ford Dr
El Centro, CA
Valley Mitsubishi
(760) 336-3500
385 W Main St
El Centro, CA
Desert Auto Plaza
(760) 482-0525
602 Wake Ave
El Centro, CA
Dion International Trucks
(760) 353-0646
397 E Evan Hewes Hwy
El Centro, CA
Johnson Lift Hyster
(760) 370-9420
1102 S Dogwood Rd
El Centro, CA
Rush Peterbilt Truck Center-El Centro
(760) 353-1820
Dogwood Rd & W Inter
El Centro, CA
Cortez Auto Sales
(951) 684-5729
5326 Mission Blvd
Riverside, CA
Westlake Motors Inc
(805) 497-4515
3755 Auto Mall Dr
Westlake Village, CA
Lone Star Auto Sales
(323) 263-7622
3945 E Olympic Blvd
Los Angeles, CA

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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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