When making the decision to buy a car, you can get a car loan through the finance department of any automotive dealer.
Just because they make it easy to get a loan doesn't mean that you should not consider getting a car loan from another source,
like your local bank, credit union or by using a reputable on-line car loan service.
-- Credit Tip by FindLocalBanks.com
Federal law requires that all creditors must state the cost of their credit in terms of an Annual Percentage Rate (APR). This rate takes into account how the loan is repaid on a yearly basis, and allows you to accurately compare the cost of credit among lenders. For example: You borrow $1000 for one year and pay a finance charge of $100. If you can keep the entire $1000 for the whole year and then repay $1100 at year’s end, you are paying an APR of 10 percent. But if you repay the $1000 and finance charge (a total of $1100) in twelve equal monthly installments, you don’t really get to use $1000 for the whole year. In fact, you get to use less and less of that $1000 each month. In this case, the $100 finance charge amounts to an APR of 18 percent.
If you are buying a new car, your local car dealer may have access to special factory incentive programs that offer
low interest rates or cash back options. Typically auto manufacturers will advertise these incentives so you can become aware of them.
However, if you are planning to buy a used car, you are likely to find competitive car loan options elsewhere.
-- Credit Tip by FindLocalBanks.com
The finance charge is the total dollar amount you pay to use credit. It includes interest costs and other costs, such as service charges and some credit-related insurance premiums. For example: Suppose you borrow $1000 for one year, and the interest is $100. If there is a service charge of $10, the finance charge will be $110.
