In these days, the financing of a car or any other vehicle remains among one of the most affordable in the loan market. Despite the new push that the short-term interests rates received last December, the average cost of the new, as well as the used cars, went up only by a quarter of a percent in terms of point as was in March 2015. With banks changing their lending policies, and modifying the rate of interests in some cases, there has been a great confusion regarding the actual car loan rates that will be suitable for you.
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The low APR
Interest rates have fallen to their all-time low and car companies have made large cuts in their loan rates. When you shop for the different car loan rates, you will come across the APR or the annual percentage rate of charge that is indicative of the rate of interest for a year. It is thus the finance charges that are expressed as the annual rate. The difference lies in the monthly fee or the rate that applies to mortgage loans, for credit cards or any other type of loans.
The average data
It is better to inquire about the car loan rates from the online calculators, or else, you can also ask from the local banks, and tell them to consider the exact loan rate that you are eligible for.
The average rates for the 60-month, 48-months new cars were 4.33 and 4.77 respectively.
The 36-month used car loan rates maintained a balanced 4.77 percent through the weeks.
The loans that are being extended by the banks are in competition with those offered by the car companies.
The rates of car loan depend on your credit history, and if you have not repaired the credit history, then the car loan rates can go high for you.
The rates are likely to vary and move to the higher side if you are opting to buy a vehicle from a private party, buying a vehicle that is older than 6 model years, have a low credit ranking or opt for smaller loans.
The best way to check out what kind of rate applies to you, you can check out the rate calculators that are displayed online with the individual financers. You can check out the individual car loan rates from credit unions, federal banks and also from insurance companies.
The brand financing options
A lot of car companies are wooing customers with the all-time low finance rates as more and more models keep entering the market and the competition spices up.
Almost every reputed car manufacturer has a lending and financing division that is offering 0% interest for as long as 66 months.
There are more models that are available for car loan rates between 0.9% to 2.99%.
Calculating your costs
There are online rebate calculators that will help you decide on which is a cheaper option – a rebate in the total cost or a low-cost loan. Statistics reveal that one out of every five car loans that are sold across the country are given to those that have poor credit scores. In such cases, your interest rate will be much higher.
It is important to consider the actual asset value of the car, and then compare it to the credit score that you have, and the exact amount that you have to pay when the loan closes. If the closing amount is much more than the actual value of the vehicle, then it is never a worthwhile bargain.