How do I get a Car Loan? A basic overview I can understand the basics of getting a car loan

If you have cash… Use it, buy the car!

I have cash but… I don’t have the full asking price of the car.

I have cash but… I don’t have the full asking price of the car. –Use what you have as the down payment on the car.

I have cash but… I don’t have the full asking price of the car. –Use what you have as the down payment on the car. –A good goal is 20% down payment.

I have cash but… I don’t have the full asking price of the car. –Use what you have as the down payment on the car. –The more $ you put as a down payment, the lower your monthly payment will be.

I have cash but… I don’t have the full asking price of the car. –Use what you have as the down payment on the car. –The more $ you put as a down payment, the lower your monthly payment will be. –Also, the more $ you put down, the less interest you will pay.

Let’s Practice! Bank Loan Calculator –You are buying a car that costs $20,000 What is your monthly payment? –What happens to your monthly payment when you put $4000 as a down payment? –What happens when you shorten the term of the loan? –What happens when you pay an extra $50 per month?

The Loan Who do I borrow the money from?

The Loan Who do I borrow the money from? –There are several possibilities: Your bank/credit union. If you have a savings/checking account your bank may offer you a loan.

The Loan Who do I borrow the money from? –There are several possibilities: Your bank/credit union. If you have a savings/checking account your bank may offer you a loan. A third party bank. This is a bank that you don’t have an account with, but they frequently do business with the car dealer and will extend you a loan. The dealer will collect info from you and submit it to the bank while you wait.

The Loan Who do I borrow the money from? –There are several possibilities: Your bank. If you have a savings/checking account your bank may offer you a loan. A third party bank. This is a bank that you don’t have an account with, but they frequently do business with the car dealer and will extend you a loan. In the case of a new car dealer, through them. GM, Ford, Chrysler have their own lending institutions.

The Loan Who do I borrow the money from? –There are several possibilities: A third party bank. This is a bank that you don’t have an account with, but they frequently do business with the car dealer and will extend you a loan. In the case of a new car dealer, through them. GM, Ford, Chrysler have their own lending institutions. Buy Here, Pay Here. Watch out! A BHPH dealer finances you themselves, but charges extremely high interest rates

What kind of interest rates are we talking about? New Cars vary from 0% up to 8%. –Search web really quickly and find some auto rates for today!

What kind of interest rates are we talking about? New Cars vary from 0% up to 8% Used car loans vary from 5% up to 10%

What kind of interest rates are we talking about? New Cars vary from 0% up to 8% Used car loans vary from 5% up to 10% –Remember the better your credit score, the lower your APR will be!

What kind of interest rates are we talking about? New Cars vary from 0% up to 8% Used car loans vary from 5% up to 10% –Remember the better your credit score, the lower your APR will be! A BHPH loan can vary from 12% up to 25%. –Back to the loan calculatorBack to the loan calculator

Questions to Ask? 1. What is the APR?

Questions to Ask? 1. What is the APR? 2. What is the term? (length of the loan)

Questions to Ask? 1. What is the APR? 2. What is the term? (length of the loan) –The longer the loan, the more interest you will pay!

Questions to Ask? 1. What is the APR? 2. What is the term? (length of the loan) 3. Are there any fees associated with the loan? –Is there an early payoff fee?

Questions to Ask? 1. What is the APR? 2. What is the term? (length of the loan) 3. Are there any fees associated with the loan? –Is there an early payoff fee? 4. Are there any finance charges? (other added fees for getting the loan)

Shop Around It would be a good idea to get a quote from three different lending institutions before signing a loan.

Buy or Lease Remember the second you drive a used or new car off of the lot, it begins to depreciate in value.

Buy or Lease Remember the second you drive a used or new car off of the lot, it begins to depreciate in value. –Some estimates say the new car depreciates 20-30% the minute you drive it off the lot.

Buy or Lease Remember the second you drive a used or new car off of the lot, it begins to depreciate in value. –Some estimates say the new car depreciates 20-30% the minute you drive it off the lot. Despite that, and interest rates, buying is still a better option financially speaking

Buy or Lease Despite that, and interest rates, buying is still a better option financially speaking. With a lease, you are usually required to make a lump sum payment up front, then monthly payments for the term of your lease.

Buy or Lease Despite that, and interest rates, buying is still a better option financially speaking. With a lease, you are usually required to make a lump sum payment up front, then monthly payments for the term of your lease. Those payments are less than loan payments, but at the end of the lease you have no car to show for it, just a stack of paid bills

Buy or Lease Those payments are less than loan payments, but at the end of the lease you have no car to show for it, just a stack of paid bills. The only scenario where it maybe financially feasible, is if you can use your lease as a business write off.

Summary 1. Go to your bank, get some rough numbers and figure out what you can afford

Summary 1. Go to your bank, get some rough numbers and figure out what you can afford 2. Save as much money as you can for a down payment, it will save a lot of interest in the long run

Summary 1. Go to your bank, get some rough numbers and figure out what you can afford 2. Save as much money as you can for a down payment, it will save a lot of interest in the long run! 3. Check out three different loan offers before deciding

Exit Ticket Check out the BigL for a quick exit ticket.