Question: I am fairly new to the United States…
I have found an exceptional car that I want to buy and feel purchasing it with a loan makes sense as I probably won’t see this good of a used car (‘92) again. I went to my bank and they want to charge me 10% interest because of the year of the car (their words). This took me by quite a surprise. Is this common in the US to vary the interest rates like this depending on what you purchase with the money loaned to you?
Answer: I would recommend two things: join a credit union, and shop dealerships for program cars. The credit union will generally give you a good rate on a car loan; I got my Taurus on a 3-year credit union note at 7%, which at the time was an excellent rate. Program vehicles are generally about a year old with plenty of miles remaining on the original warranty. Program vehicles have the added advantage of having been inspected by dealer-certified mechanics so you can be reasonably certain the thing won’t die by the side of the road in six months. This is a bugaboo for me. I have never, ever, financed a car. I save the money up and then pay cash for the car no matter what age it is. When I walk away with a car, I own it; not some finance company.
Ever added up the interest you’d be paying for a used car? Or a new one? I think it’s just plain dumb to make payments on an automobile.
It’s just not worth it, to me.
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