How a loan works Rochester NY

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

Desano Collision & Auto Sales
(585) 254-4690
211 Lyell Ave
Rochester, NY
Corbin.Com Electric Motors
(585) 334-9440
3817 W Henrietta Rd
Rochester, NY
Doan Family of Dealerships
(585) 295-5000
3975 Ridge Rd W
Rochester, NY
Pro Auto Mart Paint & Body
(585) 254-2890
207 Lyell Ave
Rochester, NY
Metzger Gear Inc
(585) 272-0050
218 Mushroom Blvd
Rochester, NY
Dorschel Automotive Group the
(585) 475-1462
Rochester, NY
John Holtz Land Rover
(585) 359-7373
4250 W Henrietta Rd
Rochester, NY
Dioguardi Auto Sales
(585) 342-2372
2100 Ridge Rd E
Rochester, NY
John Holtz
(585) 334-0880
3925 W Henrietta Rd
Rochester, NY
Dorschel Automotive Group the
(585) 334-9440
3817 W Henrietta Rd
Rochester, NY

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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

Ray Laks Acura

(716) 632-1111
7460 Transit Rd.
Williamsville, NY


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