How a loan works Huntsville TX

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

Hillcrest Ford Lincoln Mercury Inc
(936) 295-3784
540 I-45 & Lake Rd S
Huntsville, TX
Huntsville Auto Sales
(936) 291-7402
5 State Highway 75 N
Huntsville, TX
Russell & Smith Ford
(713) 663-4111
3440 South Loop W
Houston, TX
Diesel Country N
(956) 702-0240
Sugar Rd
Pharr, TX
Covert Country Chevrolet-Buick of Hutto
(512) 759-1515
1200 B Hwy 79 E
Hutto, TX
Hazelwood's Dodge Country
(281) 359-7100
18555 Highway 59 N
Humble, TX
Cantwell Auto Mart
(361) 592-7836
2151 N US Highway 77 Byp
Kingsville, TX
Pick-Ups Inc
(210) 532-2000
1120 E Southcross Blvd
San Antonio, TX
Auto Mart
(903) 843-8113
Gilmer
Gilmer, TX
Los Padrinos Auto Sales
(210) 785-9762
2424 West Ave
San Antonio, TX

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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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