I know nothing about buying a car so I'm having trouble understanding this. Car loans are for people that can't afford to buy a car right away? They get the loan from their bank? So if a car cost $8,000 and you get the loan to buy it, you would have to pay the bank monthly until you reach 8,000? or do you have to pay more? How much would you have to pay? Is it better to buy a car right away or pay with loans? Sorry if I sound stupid but I really don't know anything. Can someone explain the process? I'll give best answer.
2007-01-24 12:52:14 · 6 answers · asked by HubaHuba 1 in Cars & Transportation ➔ Buying & Selling
When you finance anything, be it a stick of gum, a television set, or a vehicle, you will pay interest on the money you borrowed. Interest, or finance charge, is rent that you pay to use the money.
If you borrow $8000, you will have to pay the bank the $8000 and you also will have to pay the interest. Interest is expressed in an annual percentage rate (APR) When you are paying a monthly payment, part of your payment is going to the interest (rent) that you are paying for using the money.
For example, if you have a loan that has an an APR of 12% (using that just because the math is easy) you would be paying 1% of the outstanding balance each month. 12% divided by 12 months in a year. If you started with an $8000 loan after the first month you would owe $8080.(1% of 8000=80)
You then make a payment of $150. You subtract that from the $8080 and have a balance of $7930. You have paid $80 in interest and $70 towards the balance of the loan.
Check with your bank or credit union to see what rate they will offer you. The lower the APR, the less it will cost you to finance the vehicle!
2007-01-24 13:13:14 · answer #1 · answered by fire4511 7 · 1⤊ 0⤋
Car loans are if you cant afford to buy the car right away. You should also consider leasing or financing by paying monthly fees. The amount you pay the bank depends on how much you took from them and how quickly you can pay it back. EXample. You can take 3000 dollars and pay 300 dollars/month for 10 months or 1500 dollars/month for two months. It is better to pay as much as you can and not receive a loan. Be careful since many banks have high interest and you will be paying a lot more money than you borrowed.
2007-01-24 13:02:38 · answer #2 · answered by El C 2 · 0⤊ 0⤋
u ought to go to a dealership. u don't have to go buy a new car... try buying used. IF YOU DO, MAKE SURE YOU GET A HISTORY REPORT!!!!go to carfax.com or vehix.com.
If u want a new car, you should go to the bank and they will show you different interest rates. You will end up paying more later if you take out a loan...if that helps.
2007-01-24 13:11:59 · answer #3 · answered by Busta 5 · 0⤊ 0⤋
i own a repair shop,and 90% of the people who buy cars buy them with loans now days,the money you borrow from a bank you pay back in monthly payment ,with interest ,the interest is based on your credit rating and the current interest rate,so you might borrow 8000 bucks and pay back 12.000 bucks,this is an example of how it works,you do pay back a lot more than you borrow that's for sure,like i said it all depends on how much you borrow,and what the rates are at the present time,good luck with this,i hope this help,s.
2007-01-24 13:01:32 · answer #4 · answered by dodge man 7 · 0⤊ 1⤋
you're not stupid, even I was clueless at first. In fact, I'm still a little clueless right now! And I'm probably older than you! Oh well, umm, yeah, that's cuz my parents did everything for me. I need to learn though one of these days.
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Yes, thank you! Even you helped me, dodge man!... And guys below him!
2007-01-24 13:00:30 · answer #5 · answered by ? 4 · 0⤊ 0⤋
If you are going to buy a car then look it up on this website first:
www.edmunds.com
2007-01-24 13:03:04 · answer #6 · answered by snowangel_az 4 · 0⤊ 0⤋