CAR
SHOPPING
AUTO LOAN Q&A
Whether you’re just beginning to shop around
or already have your teen’s first car picked out,
it’s time to consider your financing options. We
went straight to the expert, ASE Credit Union’s
Chief Lending Officer, Vikki Kizziah, for advice
on making the best decision for your budget.
Q
How do car loan terms and rates differ
when buying a used car versus a new
car?
When purchasing either a used car or a new car, loan terms
all depend on the year the automobile was manufactured.
On cars that are 10 years or older, shorter terms are usually
set because of the depreciation rate and current value. These
loans may also have a slightly higher interest rate. The
average term on a used car is around 48 months.
On the purchase of a new car, the amount financed and
car values is usually substantially higher. Longer terms and
lower interest rates can make payments more affordable. The
average term for a new car purchase is 72 months.
Q
What are the factors that should be
considered when choosing the length of
a car loan?
In considering the length of a car loan, you should consider how long you want to keep the car as well as how the
monthly payment fits into your present financial situation.
The longer the car is fi