Car loans come with unique terminologies that can be puzzling if you’re unfamiliar with the jargon. At Skaha Ford in BC, our Easy Deal online automotive shopping and financing program aims to simplify the complicated to provide our customers with a stress-free car-buying experience.
Take Annual Percentage Rate (APR) as an example. This term is often confused with a loan’s interest rate, but it has an entirely different purpose and meaning.
APR is the cost you’ll pay each year to borrow money in the auto-financing world. Expressed as a percentage, it includes any fees that you may pay, along with the loan’s interest rate. This calculation differs from an interest rate since there are no fees included in an interest rate â€“ it only reflects the annual cost of borrowing.
If you are unsure if you can afford a car loan, knowing the APR is important because it will help you comprehend how much the loan will cost you in the long run. It’s also a critical comparison tool when deciding between two financing deals. For instance, if one loan has a 5% APR and the other is 6%, you’ll pay more interest on the contract with a more significant percentage.
Our Easy Deal program has a free online credit approval app for a quick decision to see how much you may qualify for. To learn more, click here or contact our team at Skaha Ford in BC for details.