So you’ve got your eye on a brand new Porsche, but to make that purchase a reality, you’ll need to finance the vehicle. Setting up car financing through your local Porsche Center is easy, but it helps if you understand how the process works.
Navigating Car Financing at Your Local Porsche Dealer: Making Your Dream a Reality
Interest Rates Are Key
When you’re evaluating financing options, interest rates are a key consideration. The lower the interest rate is, the less you’ll pay over the life of the loan. The number you want to pay attention to is the annual percentage rate or the APR. The APR is the bottom line number when it comes to how much you’ll pay in interest on the loan.
Several different factors determine the interest rate you’re offered, including your credit history and credit score. If your credit score needs some work, it’s not a bad idea to take steps to improve it in the months before you buy a new vehicle. The amount of money you’re borrowing also influences the interest rate. Buyers are typically able to snag lower interest rates if they’re borrowing smaller amounts of money.
Down Payments Are Your Friend
Down payments are a great way of lowering the total amount you need to borrow. Making a down payment that’s 20% of the vehicle’s total purchase price is often advised and is typically enough to get you the best available interest rate. If a down payment of that size isn’t possible, put down an amount you can afford without dipping into your emergency savings.
Keep the Loan Term Short
You may have a choice about the length of your loan. Repaying your loan over a longer period can be tempting because this strategy typically results in lower monthly payments. But car loans that are repaid over fewer months cost you less in interest over the life of the loan. Look for a loan that has the shortest term possible, but also has a monthly payment that your budget can accommodate.
Pay Taxes and Fees in Cash
Taxes, title, and license fees are applied to the purchase of any new vehicle. These fees can be easily rolled into your financing package, but this means you’ll end up paying interest on them over time. If your budget allows, pay for taxes and fees upfront at the time of purchase, rather than folding them into your financing.
Armed with a basic understanding of auto lending, you’ll have no trouble arranging financing for your next purchase, and the friendly professionals on our finance team will be by your side the whole time. When you’re ready to finance your next vehicle, come see us at Porsche North Scottsdale in Phoenix, AZ.
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