Making a big purchase for the first time can be scary. If you are looking for your first car, you may be feeling a little nervous, and it’s important to know what you are getting into and how everything works. The team at Mike Toler Chrysler Dodge Jeep® RAM FIAT is here to help. This guide goes over the Jeep financing process and offers tips for making a smart decision.
How Does Financing Work?
If you’ve done some online research for financing, it may seem complicated, but it’s actually relatively simple. Financing involves borrowing money to pay for your car and then paying this money back over time. Your loan will come with an interest rate which depends on different factors, including how much you plan to borrow and your credit score.
3 Key Factors with Financing
There are three important areas you need to think about when getting ready to finance:
Down Payment
The down payment is the amount of money you have on hand right now that can go towards your car. Whatever this is, subtract it from the sale price to determine the size of your loan. Ideally, you should put up as much as possible for the down payment, but aim for at least 20 percent of the purchase price.
Monthly Payment
Now, consider what you can afford to spend monthly. A good rule of thumb to follow is to not exceed 10 percent of your income on all car-related expenses. This includes not only the monthly car payment, but things like insurance and fuel.
Loan Term
Finally, you have to decide how long you want your loan to be. The shorter this is, the larger the monthly payments will be. With a long loan, those payments get smaller, buy you will pay more in interest. Choosing a term somewhere in the middle could be your smartest bet—we recommend a term around four years.
Talk to a Jeep® Financing Professional in Morehead City, NC
Still have questions or concerns about financing? Get in touch with Mike Toler Chrysler Dodge Jeep RAM FIAT in Morehead City, NC. We’ll help make the process quick, easy, and stress-free.