How well do you know about used car interest rates? Do you know that a used car’s interest rate can change fairly quickly? Buying a vehicle is one of several big purchases you’ll ever make in your life, and most people, yourself included, will end up financing the vehicle. Most people have no problems researching the cars they have an interest in. This means looking at several variables including:
- Gas mileage
- Coarse price
- Design qualities
- Added features
What people tend to forget, however, is that the price of the vehicle is affected by the loan’s interest rate. Based on the above information, isn’t it important that you do your research on a car loan? Shouldn’t you shop around to find the best car loan for you? When you’re shopping around for vehicle, don’t forget to look at the used car interest rates.
Before You Look For Your Next Used Vehicle
It’s important to look for a loan before you go looking for a car, as it can make a considerable difference when you want an interest rate for a used car. It’s sound so easy, right? Just think about the last time you went car shopping and actually saw a vehicle you’d be interested in. Didn’t it make your stomach curl when you saw that salesman approach?
You feel like an animal trapped in a cage with nowhere to go. You talk to one another but don’t even ask about the price. The reason you don’t ask is because you already know the answer. You know the salesman is going to smile and say “it depends”. Depends on what, you ask? No doubt, the financing of the vehicle and the payments you can take on.
Examples Of Used Car Interest Rates
Not real sure how the interest rate will affect the price of your vehicle? Use these examples to help you get an understanding of how interest rates can have a dramatic affect on a vehicle’s overall price and your payments. Say you’re looking for a vehicle that’s $20,000. You decide to put down $3,000 already on your vehicle, which brings the loan down to $17,000. Here’s an idea of your loan and payments with different percentages.
5 year loan at 7 percent; this equates to a payment of $336 with a total price of $23,500.
5 year loan at 11 percent; this equates to a payment of $369 with a total price of $25,500.
6 year loan at 7 percent; this equates to a payment of $289 with a total price of $23,900.
6 year loan at 11 percent; this equates to a payment of $323 with a total price of $26,300.
What Does It Mean? Three Interest Rate Factors To Consider When Buying A Car
Okay, it looks like gibberish, right? Look back at the different loans. Do you see how the short loan duration with less interest rate makes the car cheaper? By doing homework on the vehicle in the beginning, you can save thousands of dollars in the end. Remember, used car loans interest rates can change rapidly based on three factors:
- Where you obtain the car loan
- How long the loan is for
- How much shopping you do before you pick out a car
It would be in your best interest to shop the different lenders to find the best rate and payment for you.
It doesn’t take long to apply for a used car loan; generally 30 minutes or less. These companies will take your application to various places to find the best interest rates. Don’t forget that your monthly payments are not the only thing you’ll be paying out on your car. You still have to contend with the other parts of the vehicle including insurance, taxes, maintenance, etc.