How a loan works New Port Richey FL

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
Clearwater Toyota
(727) 799-1234
21799 US Hwy 19 N
Clearwater, FL
New Port Lincoln Mercury Inc
(727) 849-6777
New Port Richey, FL
Ferman Chrysler Jeep Nissan of New Port Richey
(727) 847-5555
3939 US Highway 19
New Port Richey, FL
Ferman Chrysler Plymouth Jeep Eagle
(727) 847-5858
3939 US Highway 19
New Port Richey, FL
Friendly Kia & Isuzu
(727) 815-9611
5819 US Highway 19
New Port Richey, FL
Deel Volkswagen
(305) 448-3335
3673 Bird Rd
Miami, FL
Acura of South Florida
(954) 421-2424
3801 S State Road 7
West Park, FL
Cox Chevrolet Inc
(941) 756-0621
2900 Cortez Rd W
Bradenton, FL

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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

Lexus of Clearwater

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

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