What Is APR Financing for Cars?

Video Transcript

"My name is Roger Groh. We're here to talk about annual percentage rates that you are going to pay on car loans meaning have you tried to buy a car recently? Well good luck because it is hard to borrow money if you try to do it but if you were to borrow money they're going to charge you interest rates on them and the question is how do you define that and what are they? One of the common terms that you see in installment financings like automobiles or it could be on other purchases too. If you buy a refrigerator for instance on credit they use APR or if you finance a piece of equipment usually they use APR. APR is the annual percentage rate that you are going to pay on money that you borrow from a bank to buy an asset. It could be a car it could be one of those other things, go buy a boat, same thing, it's still APR. It is really just the amount of money that you are going to pay to the bank annually for that loan. Now there are a number of ways that you can finance car purchases including through the dealerships. Today the dealers are a very viable option maybe the only option you have and it is worth a discussion with your local dealer about the ways that they know locally in the market where you live or work on how you can borrow money at APR or The Annual Percentage Rate. What are you going to pay? Well probably not less than 1% and it could be all the way up to 20 if you have really crummy credit. So it is a broad range and it really depends upon the amount of money that you are borrowing and what your history has been in the past about repaying loans that you borrow from other people. So I'm Roger Groh and that's a little bit about annual percentage rates."