Financing Your New Car
Seventy percent of all new cars and trucks are financed. Buyers have the option of financing their new car from the dealer, banks, credit unions and other loan institutions and companies. Rates vary, but with today's low-interest incentives offered by manufacturers, the odds are you will find that the dealership is a very competitive financing source.
The best way to compare financing terms is to look at the annual percentage rate (APR), which is the actual interest rate the borrower pays annually on the unpaid balance of the loan. The APR you receive will depend on your credit history and the information on your credit application. McCurley Toyota charges no loan fees or credit report fees.
Longer loans mean lower monthly car payments, but they increase the overall cost of the car and delay equity build-up. Know the exact terms and total costs of your loan, and be aware that early payoff of a car loan may result in a smaller refund of finance charges than you expect.
What You Can Afford to Spend
It's human nature to want more than we need or can afford, but long-term satisfaction is far more likely with a car or truck that does not end up being a constant strain on your budget. Remember, there is a wide selection of new cars and trucks today in all price ranges. All offer aerodynamic styling, high technology systems and better performance, handling and longevity. So be realistic and honest with yourself.
There is no magic formula to determine how much of your income should be allotted to pay for your new car. Some people are willing to spend more than others on their cars. But a car should fit comfortably within your budget without crowding regular fixed expenses or crimping your lifestyle. How much you spend on a new car depends on your overall financial situation - income versus debt. If you need to finance a vehicle, it also depends on how much down payment you have and how much you can comfortably allot to monthly car payments. You should determine how much you can afford to spend on a new vehicle.
Buy or Lease
Increasing numbers of people are leasing vehicles as an alternative to buying them. McCurley Toyota offers closed end leases.
With a closed-end lease, at the end of the lease term you simply return the vehicle; you don't owe any additional money unless the car or truck shows more-than-normal wear and tear, has been damaged or has been driven more miles than are specified in the lease.
Advantages of leasing include:
- fast and easy possession, with little or no down payment.
- generally lower monthly payments.
- ease of paperwork, registration and inspection.
These advantages have made leasing particularly attractive to people who use their cars for business, need a car for a limited period of time, trade their cars at regular intervals, want to know their monthly costs in advance or would like to invest the money in other activities.
The obvious disadvantage to leasing is that you do not own your vehicle. You build no equity as you make payments and, unlike loan payments, you own nothing at the end of your lease to use as a trade-in on your next vehicle. Only you can decide which method is right for you. Once you have decided on a specific make and model, the dealership salesperson can help you make this decision by showing you on paper the financial differences between leasing and buying the same vehicle.
McCurley Motors, Inc. is 100% committed to customer satisfaction before, during and after your purchase. Credit Union members always welcome. No money down financing.