Financing is an important part of the car-buying process. Purchasing a new vehicle is one of the more expensive purchases you will make in your lifetime, which is why you need to know how how borrowing money works. Honda of Tiffany Springs has put together a financing guide to help you better understand what you need to know about this key facet of car ownership.
You will likely have to borrow money to purchase your new Honda unless you’re paying the full value in cash. Because of this, you will need to get a car loan. With this system, you will be required to make a monthly payment over the course of a few years. These payments can typically be looked at in two parts – your principal amount, which is the amount of money you’re borrowing, and your interest, which is the additional cost of the loan. Your interest rate can influence how much – or how little – you will be paying in addition to the amount you’re borrowing.
If you’re looking for flexibility in your monthly payments, then you need to consider the amount of time you have to pay your loan back. Loan terms can vary from 12 to 72 months, so it’s important to consider this when you’re setting up your plan. The finance team at Honda of Tiffany Springs will help you find the right loan deal for your budget, even if you have less-than-ideal credit.
The longer your loan term is, the more money you will pay over time. While longer terms can reduce the amount of money you owe each month, it will add up in the future, resulting in a greater total expenditure due to interest. Short-term loans typically have a higher monthly cost, but will ask you to spend less in the long run. Keep in mind, though, if you can secure financing with zero-percent interest, then term length won’t influence your monthly payment.
To get started financing your next Honda — or learn more about how the whole process works — don’t hesitate to contact our financial experts at Honda of Tiffany Springs.