Benefits of Financing a Vehicle
The prospect of buying a new car can be exciting and stressful. There are many things to consider when purchasing a new car. In addition to deciding on the different features and functionality you would like in your vehicle, you also want to think about how to pay for your car. Financing is one option to consider. It has many benefits to make it a top consideration.
What is Financing?
Financing a vehicle means you are obtaining a loan from a lender to purchase your vehicle. You agree to pay back the loan over time with interest. The lender gives you the money upfront to purchase the vehicle. Then, you make regular payments of a certain amount over a specific period of time.
What are the Primary Types of Financing?
There are two different types of financing. They are direct financing and dealership financing.
Direct financing is when you receive money from a credit union, bank, or lender online. These loans can be unsecured or secured. Each loan has different requirements, which may depend on your credit history. Then, you make payments to the lender. Dealership Financing goes through the car dealership. They arrange the financing for you through some lender or financier. Dealership financing often provides special promotions and low rates. Each of these types of financing has its own conditions and terms.
Financing Promotions
Financing promotions often offer low-interest rates. These interest rates may include low or zero percent interest rates for a specific period. The low or zero interest may only be offered with a specific amount of time that is pre-decided by the lender. You may not be able to select the amount of time.
An annual percentage rate (APR) offer is typically a lower interest rate than other offers. This provides you with significant savings over the entire life of the loan. When you have a lower interest rate, it also gives you a lower monthly payment. In addition, APR offers have flexible terms, which may include a lower down payment or a loan over a longer period of time. When you have a longer amount of time, such as 60 months, to pay the loan on your vehicle, it makes it easier to stay within your budget and ensure that you can pay for all your monthly expenses. In addition, the longer the length of the loan means you pay a lower monthly payment each month, making it much more manageable. You may also benefit from a streamlined application. This type of application makes it easier and simpler to get approval. This saves you time and stress when applying for a car loan.
When financing a vehicle, a lender may offer you interest rates of 2.9% or 6.9%. However, these rates are very different and can have a significant impact on the total cost of the loan and the monthly payments. A 2.9% interest rate is a low rate and is typically offered to customers with excellent credit. This rate provides significant savings over the life of the loan. On the other hand, a 6.9% interest rate is generally considered a higher rate. This higher rate is often reserved for those that have less-than-perfect credit.
Even though the 6.9% rate is higher than 2.9%, it is still a relatively low and competitive rate among auto financers. The higher the interest rate means that you will have higher monthly payments and higher total interest charges over the life of the loan.
Additional benefits to financing include cash-back incentives and extended warranties. With some financing options, the lender may offer cash back. For example, it could be a set rate or a percentage of the price. Other promotions may include an extended warranty or other promotions, including a free tire rotation, oil change, or other maintenance.
Financing a vehicle helps to make purchasing a car more affordable because you are able to spread the cost over multiple years. This makes it easier to include your car payment in your overall budget. If you are interested in financing a vehicle, contact Bortz Chevrolet to schedule an appointment to speak to one of our knowledgeable salespeople.
What is Financing?
Financing a vehicle means you are obtaining a loan from a lender to purchase your vehicle. You agree to pay back the loan over time with interest. The lender gives you the money upfront to purchase the vehicle. Then, you make regular payments of a certain amount over a specific period of time.
What are the Primary Types of Financing?
There are two different types of financing. They are direct financing and dealership financing.
Direct financing is when you receive money from a credit union, bank, or lender online. These loans can be unsecured or secured. Each loan has different requirements, which may depend on your credit history. Then, you make payments to the lender. Dealership Financing goes through the car dealership. They arrange the financing for you through some lender or financier. Dealership financing often provides special promotions and low rates. Each of these types of financing has its own conditions and terms.
Financing Promotions
Financing promotions often offer low-interest rates. These interest rates may include low or zero percent interest rates for a specific period. The low or zero interest may only be offered with a specific amount of time that is pre-decided by the lender. You may not be able to select the amount of time.
An annual percentage rate (APR) offer is typically a lower interest rate than other offers. This provides you with significant savings over the entire life of the loan. When you have a lower interest rate, it also gives you a lower monthly payment. In addition, APR offers have flexible terms, which may include a lower down payment or a loan over a longer period of time. When you have a longer amount of time, such as 60 months, to pay the loan on your vehicle, it makes it easier to stay within your budget and ensure that you can pay for all your monthly expenses. In addition, the longer the length of the loan means you pay a lower monthly payment each month, making it much more manageable. You may also benefit from a streamlined application. This type of application makes it easier and simpler to get approval. This saves you time and stress when applying for a car loan.
When financing a vehicle, a lender may offer you interest rates of 2.9% or 6.9%. However, these rates are very different and can have a significant impact on the total cost of the loan and the monthly payments. A 2.9% interest rate is a low rate and is typically offered to customers with excellent credit. This rate provides significant savings over the life of the loan. On the other hand, a 6.9% interest rate is generally considered a higher rate. This higher rate is often reserved for those that have less-than-perfect credit.
Even though the 6.9% rate is higher than 2.9%, it is still a relatively low and competitive rate among auto financers. The higher the interest rate means that you will have higher monthly payments and higher total interest charges over the life of the loan.
Additional benefits to financing include cash-back incentives and extended warranties. With some financing options, the lender may offer cash back. For example, it could be a set rate or a percentage of the price. Other promotions may include an extended warranty or other promotions, including a free tire rotation, oil change, or other maintenance.
Financing a vehicle helps to make purchasing a car more affordable because you are able to spread the cost over multiple years. This makes it easier to include your car payment in your overall budget. If you are interested in financing a vehicle, contact Bortz Chevrolet to schedule an appointment to speak to one of our knowledgeable salespeople.