Did you know that the average cost of a car in the United States is over $48,000?
For some people, this may be too large of an expense to justify on a car. If you are someone who wants an Audi car but does not know if you can afford it, know that you do have Audi finance options.
What should you know about Audi finance rates? This guide goes over some of the biggest factors.
Consider Your Budget
Before you even look at different finance rates, you must set a budget for your car purchase. The reason this is so crucial is that it can allow you to rationally evaluate if the finance terms are acceptable for you.
Let's say that you were not looking to spend more than $30,000 to buy a car. You can enter a car dealership and get offered a deal where you would not have to pay the principal. However, you may read the finance terms closely and discover that after interest payments, you would end up well over this budget.
Having a budget allows you to define a line where you need to pull the plug on a deal. On top of this, you need to factor in what the total price is after interest rather than just the principal.
Consider the Number of Months
Another thing you need to review carefully is how many months of payments are on your finance rates. This can impact the total amount of money you have to pay, along with how long the interest carries over.
Some people prefer to keep these finance term agreements as short as possible to save interest. However, the traditional term agreements are quickly starting to change.
At one point, the average finance term length was 48 months. Now, it is closer to 72 months. Some lenders go as long as 84 months.
However, you need to remember that if you choose to sign finance rates with a longer-term agreement, you are likely going to be paying much higher total interest. Review this carefully to see if it is the best option for you.
Pay Attention to Interest Rate
Your annual interest rate is crucial here because it can raise your total payments significantly.
An example of this is if you owe $5,000 in principal payments every year on a car. If you have 5% interest annually on these payments, that is an extra $250 in payments every year. However, raise this by just two percent, and you are paying $350 extra every year.
Some people may overlook this when they are making their original finance agreements. However, if this goes on for six years, it can mean that someone is paying an extra $600 in interest payments.
While some people may have no choice but to pay higher interest rates, do not do this if you do not have to. Look at interest rates carefully and try to get the lowest one available.
Shop Around
Going off of the above, you do not want to sign up for the first finance terms that are presented to you. The reason is that you could run into a situation like the above where you are paying more interest than necessary.
Do some research on this and find out what finance rate you should be expected to pay for your Audi vehicle. Then, if you do not like what is presented to you, walk away until you find something that better suits your needs.
Improve Your Loan Application
One of the biggest reasons why you may not get a good finance rate originally is because you may have a poor loan application. What you need to do is review this carefully before you present it to a lender.
Then, see what you can improve on before submitting it to a lender again. What should you be looking for?
For starters, see what your credit score is. Your credit score measures how high your credit line is, what your current debt looks like, and how often you pay monthly payments on time.
Lenders want to see a higher credit score here to show that you are punctual and that you have minimum debt. Credit scores tend to range from 300-900. If you can show that you are on the higher side, a lender is likely to give you a lower finance rate for your vehicle.
You can also improve your loan application by having more money available to put down on your car. This lowers the total loan amount, and if it is by a decent enough margin, a lender may feel less concerned about giving you said loan. As a result, it could help lower your finance rate for this loan.
Get a Co-Signor
Finally, if all of the above options fail to improve your loan application, you may have to seek outside help. This can come in the form of a co-signor.
Typically, this is someone who you trust deeply and that person likely feels close enough to you to sign this type of finance agreement.
What can this do for you? It can help you get a lower finance rate, and it allows the lender some insurance in case you cannot pay the loan back yourself.
A co-signor is typically someone who is more financially qualified to take on an auto loan. This means someone who has more savings, a higher income, or even a higher credit score.
Learn More About Audi Finance Rates
These are some of the most important things to consider when looking at Audi finance rates. If you take all of these factors into consideration, you are much more likely to get the Audi finance rate you are looking for.
Luckily, Audi Charlotte is here to help. We have treated our customers like family for over 20 years and commit to them for the long haul.
So, do not just think of this as getting an Audi lease or purchase. Think of it as finding the support system you need for your vehicle.
Message us here to learn more.
