Auto Interest Rates
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Auto interest rates refer to the fee charged by a bank or a financing agency for funding the purchase of a new or a used vehicle. These vehicle interest rates are determined by the size, capacity and model of the automobile, the financial position of the borrower and the duration of the loan. Auto interest rates can be fixed or variable, and are often also determined by who is lending, whether it is an automobile dealer, a bank or a private financier.[br]
Car Loans and Auto Interest Rates
Attractive auto interest rates and the easy availability of loans have ensured that over 50% of vehicle purchases these days are done through financing. Auto interest rates charged by the various agencies and the varied funding options offered by them play a key role in vehicle sales. Car or vehicle loans make the purchase of a new or used vehicle easy for customers who do not have the requisite money in hand. But car loan interest rates carry hidden costs that generally prove to be much higher than the cost of buying upfront. So, a customer needs to carefully evaluate the various funding options and compare the auto loan interest rates of various financers before taking a final decision.[br]
Options Available for Auto Financing and Auto Interest Rates
The most common method of funding the purchase of a new car is to approach the dealers. However, the auto interest rates charged by the various dealers are often quite high. Automobile dealers make a significant amount of money by overcharging the customers in the form of high auto loan interest rates.
Several automobile companies have their own finance agencies or have tied up with certain banks or financial institutions to fund their vehicles. These agencies offer loans at attractive auto interest rates to encourage the sale of vehicles from their parent company.
Most banks also provide vehicle funding options. Auto interest rates charged by these agencies depend on the market rates and the financial position of the borrower. Prime lending is to people who have excellent credit ratings, while sub prime lending is for people whose financial position is not that good. The auto interest rates on prime lending are lower than that for sub prime lending.
