How a loan works Salt Lake City UT

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

Subaru Authorized Sales & Service
(801) 355-7571
1207 S Main St
Salt Lake City, UT
Werner Fleet Truck Sales
(801) 973-6184
6223 W 2100 S
Salt Lake City, UT
Ken Garff Automotive Group
(801) 257-3000
Salt Lake City, UT
Larry H Miller Dealerships
(801) 264-3330
Salt Lake City, UT
Standard Auto Sales
(801) 485-8777
1551 W 3300 S # 2
Salt Lake City, UT
Ken Garff Volvo-Downtown
(801) 257-3500
525 S State St
Salt Lake City, UT
Larry H Miller Dealerships
(801) 264-3650
Salt Lake City, UT
Pyramid Auto Sales
(801) 969-1500
3752 W 4700 S
Salt Lake City, UT
Ken Garff Automotive Group
(801) 257-3030
Salt Lake City, UT
Accuracy Auto Sales and Service
(801) 266-3609
82 E 4500 S
Salt Lake City, UT

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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

Mercedez-Benz of Lindon

(801) 222-4400
530 S. Lindon Park Drive
Lindon, UT

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