How a loan works Spokane WA

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

Nissan
(509) 468-9000
9000 N Division St
Spokane, WA
Inland Truck Sales
(509) 534-8441
4105 E Broadway Ave
Spokane, WA
Wendle Motors Inc
(509) 484-4800
4727 N Division Northtown
Spokane, WA
Car Mart
(509) 534-7505
974 E 3rd Ave
Spokane, WA
Dicks Auto Sales
(509) 487-0032
3117 E Glass Ave
Spokane, WA
Select Credit & Leasing Llc
(509) 744-0390
10310 W Westbow Blvd
Spokane, WA
Fast Way Transport Inc
(509) 533-0704
1001 N Havana St
Spokane, WA
Downtown Honda
(509) 353-4700
1125 W 2nd Ave
Spokane, WA
Wendle Motors Inc
(509) 484-4800
4727 N Division St
Spokane, WA
Blue Chip II Auto Sales
(509) 535-0994
2027 E Sprague Ave
Spokane, WA

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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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