If you need an auto loan in new york be prepared before you go to the dealership. The best option is to have a loan before you go to get the car.
In direct lending, you get a loan directly from a bank, finance company, or credit union. You agree to pay, over a period of time, the amount financed, plus a finance charge. Once you enter into a contract with a dealership to buy a vehicle, you use the loan from the direct lender to pay for the vehicle.
The Basics of Car Loans
A car loan is one way for you to purchase a new or used vehicle. You borrow money from a lender and pay them back over time, usually with interest, unless you’re able to take advantage of a manufacturer’s special zero percent interest offer. The amount you borrow is called the loan principal or financed balance.
Lenders almost always charge interest, which is how they cover their administrative costs, cover losses from people who fail to make timely payments, and make a profit. The interest rate is a percentage of the loan that you must pay back in addition to the loan principal. Interest rates are presented as an annual percentage rate.
You’ll need to use a financial calculator to determine how the interest rate affects your monthly payment (use the U.S. News Car Payment Calculator). Changes in interest rates can dramatically change the affordability of that dream car. If it costs $20,000 and your 60-month loan rate is 5 percent, you’ll have a payment of $377 per month. If you’ve done your research and find a rate of 2.9 percent, you can drop it to $358 per month.
That might not sound like a huge difference on the monthly payment, but over the life of the loan, you’ll pay $22,620 for your $20,000 car at 5 percent, while you’ll only pay $21,480 at 2.9 percent – that’s a $1,140 difference. While you’re paying back the lender, you’re also responsible for all taxes, fees, and expenses, like gas, insurance, and maintenance.
Show Up with Financing
As with nearly every aspect of the car buying process, financing is negotiable. Unfortunately, it’s also confusing, which a dealer can take advantage of to make more money. In many cases, the dealership makes more money from the financing than they do from the sale of the car. So while a dealership might offer you a spectacular price on that dream car, they’re likely to come out ahead by selling you on expensive financing.
While many car buyers want to believe that the car dealership is offering them the best financing rates, that’s not always the case. While you should certainly consider the loan the dealership offers, the best way to get the lowest interest rate is to bring a pre-approved loan from your bank, credit union, or third-party lender when you go to the dealership. If the dealership can beat the interest rate, fees, and other loan terms, you can decide to take the dealer’s offer. If not, you already have financing in hand, and you can focus on the price of the car and your trade-in.
Now that you understand the basics of financing a car, you’ll be able to get the best auto loan in new york for your budget. Remember the foremost rule of car-buying: Knowledge is your best friend.
This page provided some great information but one thing i will add is make sure you figure out your budget before you even go for a alone, choose what type of vehicle you want and don’t let your emotions kick it so you are practical when getting an auto loan in new york.