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How a loan works Florida

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

Lexus of Clearwater
(727) 726-6000
27547 US Hwy 19 N
Clearwater, FL

Countryside Ford of Clearwater
(727) 797-2277
24825 US Hwy 19 N
Clearwater, FL

Ed Morse Cadillac
276-2441
2300 S. Federal Hwy
Delray Beach, FL

Crown Acura
(727) 507-8866
18911 US Hwy 19 N
Clearwater, FL

Harberson RV-Pinellas, LLC
(727) 539-8714
17028 US Hwy 19 N
Clearwater, FL

Lokey Infiniti/Mercedes
(727) 531-4774
19740 U.S. 19 N.
Clearwater, FL

Maroone Chevrolet of Delray
454-3900
1111 Linton Blvd.
Delray Beach, FL

Switchtrader
954-437-3417
2460
Pembroke Pines, FL

SwitchTrader.com
954-442-7409
9000 Sheridan Street Suite 14
Pembroke Pines, FL

Clearwater Toyota
(727) 799-1234
21799 US Hwy 19 N
Clearwater, FL

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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

Lexus of Clearwater

(727) 726-6000
27547 US Hwy 19 N
Clearwater, FL

Read more about How a loan works

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Regional Articles

- How a loan works Altamonte Springs FL
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- How a loan works Destin FL
- How a loan works Dunedin FL
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- How a loan works Englewood FL
- How a loan works Eustis FL
- How a loan works Fernandina Beach FL
- How a loan works Fort Lauderdale FL
- How a loan works Fort Myers FL
- How a loan works Fort Pierce FL
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- How a loan works Hallandale FL
- How a loan works Hialeah FL
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- How a loan works Holiday FL
- How a loan works Hollywood FL
- How a loan works Homestead FL
- How a loan works Homosassa FL
- How a loan works Hudson FL
- How a loan works Immokalee FL
- How a loan works Inverness FL
- How a loan works Jacksonville Beach FL
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- How a loan works Jupiter FL
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- How a loan works Melbourne FL
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- How a loan works Mount Dora FL
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Save money on your auto loan when buying a used vehicle. Learn how to lower your vehicle price and get the best loan contract.

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Business Services	Fashion	Industrial Goods & Services	Retail & Consumer Services
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Computer Hardware	Franchise	Legal	Telecommunications
Construction	Health	Miscellaneous	Trade Shows
Education	Holidays	Nightlife	Travel
Entertainment	Home Appliances	Online Database	Weddings
Environmental	Home Electronics	Pets	World History