Posted Friday, August 12, 2022
When you finance a used car, one of the most important concepts you should understand is APR – the annual percentage rate. It shows the total cost of your future borrowing. APR differs depending on the amount you borrow, the lenders’ rates and fees, your credit score, and other factors.
We have prepared this APR FAQ to help you understand why APR is essential when financing your car in Indianapolis. Read on to feel more confident and start your financing process with Indy Auto Man, a reliable Indianapolis dealership.
The average used car loan rate is 8.66%, according to Experian’s data from the second quarter of 2021. In general, your interest rate may be anywhere from 4% to 20% for a used car. If you managed to get a rate under 8%, it can be considered a good APR for a car loan.
A zero APR means that a lender is not charging any fees or interest on the loan. Unfortunately, lenders offer 0% APR rarely if ever, and only for new or certified pre-owned cars.
When you finance a car, a good idea is to get GAP insurance. This way, you will be financially protected in case of your vehicle is stolen or totaled in an accident, even if the unpaid principal balance due on the loan is not covered by the insurance settlement amount.
If you are going to finance a used vehicle, the only way to find a car loan with a low APR is to get pre-approvals from different lenders. Such offers are usually valid for 30 days, and you will have plenty of time to make the decision.
If you are not impressed with the offers you received, you can do the following :
At Indy Auto Man car dealership, we always strive to provide our customers with the most advantageous car financing in Indianapolis. We have a partnership with 24 banks and credit unions to guarantee the best rates for your loan.
Lock your rate, have your time, shop around and return to buy a used car at Indy Auto Man!