If you’re thinking about buying a new or used car, you might be wondering how to finance your purchase. At McGuire Buick GMC, we know financing can seem intimidating, especially if you’ve never been through the process. Today, we’re going to briefly explain what some of the most common finance terms actually mean.
Basics of Car Financing
To allow you the flexibility to make payments after purchasing or leasing a vehicle, a bank will lend you money to help you pay for the vehicle, which you’ll then repay over time. The terms of your finance agreement can vary depending on a few factors, including:
- Interest rate: This is the additional annual charge that is added to the amount borrowed. For example, a 2.9% APR (annual percentage rate) for 60 months means that in addition to the amount you borrow for your purchase, you’ll repay a further 2.9% for the duration of those five years.
- Credit history: Buyers with a high credit score and a good credit history can qualify for lower interest rates.
- Length of loan: A 72-month finance period will tend to come with lower monthly payments, but you may pay more over time than you would with a 60-month financing plan.
- Down payment: The more cash you can put down for your car, the less you’ll need to finance it. This can mean lower payments and/or a shorter loan term. If you have a car to trade, our dealers in Little Falls, NJ can appraise your current vehicle and discuss your trade-in options.
- Special offers: From time to time, manufacturers will offer special purchase and leasing incentives on their new cars. These incentives can help you secure a lower interest rate or even earn cash back.
You can look for current Buick and GMC finance offers on our website or simply contact our helpful McGuire Buick GMC finance specialists if you have any more financing questions.