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APR vs Interest Rate

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If you’re shopping around for an auto loan, you’ve probably had a few terms thrown at you that have left you scratching your head. Two terms that borrowers find most confusing are car APR and Interest. Many lenders make it difficult to understand what these are and how they affect the cost of your Indianapolis, Bloomington or Plainfield purchase. Read on to learn more, then start the finance process now with Andy Mohr Automotive.
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APR

The Annual Percentage Rate (APR) is typically the higher of the two numbers. APR refers not only to the interest you pay for financing, but also includes annual fees, prepaid finance charges, and other fees associated with maintaining your loan contract. The APR can differ greatly from the quoted interest rate and can catch shoppers off-guard. 

Interest Rate auto shopping

The interest rate simply shows the cost of borrowing money, and the total dollar amount will depend on the principal or amount borrowed. This amount does not reflect additional fees and taxes added by state and federal authorities.

Reducing APR and Interest Rates

By reading your contract carefully and understanding the fees associated with your loan, you will be in a better position to negotiate for lower rates. But there are other ways to reduce the overall cost of your loan, including:

Save a Large Down Payment
Improve Your Credit
Have a Co-Signer
Prepay Fees
By using any of these tactics, you can save yourself hundreds – if not thousands on the cost of financing your next vehicle.

Let Andy Mohr Automotive Help You Finance

When you’re ready to get rid of that old beater and get into a quality new or used car, let Andy Mohr Financing help. We can help you set up a budget, explore financing options, and get a low rate on a new loan even if your credit is less than perfect. Visit our library to learn all about financing today, then come see us for a great deal.

Don’t Get Left in the Dark About Car APR and Interest Rates, Trust Your Indiana Finance Center.
Contact Andy Mohr Automotive to get started on your next car loan.

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