Annual Percentage Rate or more commonly referred to as APR, has a direct impact on your car buying process. Often, APR and interest rates are used interchangeably, but they only mean the same thing when you’re applying them to credit cards. APR and interest rates are separate things when you’re talking about securing a loan for your car purchase from Copeland Chevrolet in Brockton, Massachusetts.
“Instead of just including the interest rate, APR can also include fees you may be required to pay to take out the loan. So APR gives you a better idea of the cost of the loan as a percentage,” according to Credit Karma writer Lance Cothern.
Basically, APR represents how much extra you have to pay to borrow money for your car purchase. You need to factor in the APR so you have a more accurate picture of how much your loan will actually cost you.
An APR can have a fixed or variable rate. A fixed APR doesn’t fluctuate. This helps you assemble a more predictable budget. A variable APR does change. Sometimes it favors you, sometimes it doesn’t. You might get a lower interest rate upfront, but based on the activity of the associate index, you could end up paying much more than you planned.