I want to know about Financing a car
2007-11-06 09:47:09 · 5 answers · asked by redzcraziipassion 1 in Cars & Transportation ➔ Buying & Selling
Financing is taking a loan out for a vehicle. This means that a lender will "own" the vehicle until you make the final payment. Your name will be listed as the owner, however the bank is the one that technically paid for the vehicle, giving them the right to take back the vehicle if the loan is not paid as per the agreed terms of the contract. They will also hold the title until your contract is satisfied.
Make sure any loan you get is simple interest. I will give you a link to a free used car site that has an entire page about financing. It's important to know how interest accrues on a loan and to understand that you will pay more interest than principal for the first half of the loan. Good luck and I hope this helps.
http://www.theautoevaluator.net/Refinance.html
2007-11-10 03:38:30 · answer #1 · answered by The Auto Evaluator™ 7 · 1⤊ 0⤋
Well I can tell you my experience with a pay here, buy here place. I put down 1000 on my car which made the amount that was to be financed @ 5000. My interest (the rate they charge you for loaning you money to buy the car) was 6.9%. The finance charges came up to be around 350-400 dollars which means that altogether I'm paying 5350-5400 for the car. I think this process is different when you go to the bank.
2007-11-06 09:59:57 · answer #2 · answered by aric_714 4 · 0⤊ 0⤋
One of the first steps is they run your credit. Low score=high interest. High score=Lower Rate.
While you are going back and forth with a salesperson or manager. The finance guy is shopping you to banks that buy loans in your score range on a computer. The banks send back an answer(accept or decline). If they approve it they send a rate. It varies from bank to bank and state to state but most banks will allow the car dealer to hold "points." Meaning....the bank says we will buy this loan at 7% and you can charge the customer up to 9% and they pay the dealership the difference. Like I said these numbers vary.
This seems to offend people but it saves the customer from having to run from bank to bank asking for loans. The banks don't have to hire many loan officers to handle all the customers looking for loans. Imagine doing this if you have poor credit. It is a service the dealership offers.
They are not non-profit organizations. When you pay xxx amount of dollars for a steak or a sandwich at a restaurant you pay for their service. Dealers are no different.
Take your time picking your car(do your homework)Buy with your head not your eyes or heart, stay in your budget and enjoy your car.
2007-11-06 16:14:41 · answer #3 · answered by askmeiambored 2 · 0⤊ 0⤋
You go to the dealer-they sell you a car.
They would like to set you up with their financing at the highest
% rate they can get.
Or you can go to a bank and try to obtain a auto loan on your own. If you have established good credit you can do this.
If your credit rating is low, expect to pay a higher % rate.
2007-11-06 10:11:33 · answer #4 · answered by Fred F 7 · 0⤊ 0⤋
it depends on your credit score and how much money you put down. the better your score and down payment the less your note will be every month.
2007-11-06 10:00:41 · answer #5 · answered by Tax Man 2 · 0⤊ 0⤋