How a loan works Prescott AZ

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

Diamond Motors
(702) 477-0707
2122 Golf Links
Prescott, AZ
Tim's Toyota Center
(928) 772-1819
3201 N Main
Prescott Valley, AZ
Galpin Ford
(602) 252-0116
1000 Sandretto Dr
Prescott, AZ
Lamb Chevrolet Cadillac
(928) 778-5262
400 Prescott Lakes Pkwy
Prescott, AZ
Galpin Ford Inc
(928) 445-3673
1000 Sandretto Dr
Prescott, AZ
Tim's Hyundai Isuzu
(928) 445-7350
3250 Willow Creek Rd
Prescott, AZ
Prescott Valley Auto Brokers
(928) 775-5437
402 E Sheldon St
Prescott, AZ
Prescott Honda
(928) 778-5500
1240 W Iron Springs Rd
Prescott, AZ
Big Two Toyota-Mitsubishi
(480) 218-2029
6222 E Auto Park Dr
Mesa, AZ
Yates Buick Pontiac GMC
(623) 932-1818
13845 W Test Dr
Goodyear, AZ

provided by:
2007 Volvo XC70
(Continue to more photos from MyRide.com)


 



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

Diamond Motors

7024770707
2122 Golf Links
Prescott, AZ


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