The vehicle payment contract applies to all types of vehicles for which the buyer and seller agree that the price is paid in stages. In most cases, the buyer agrees to pay in advance an amount called a down payment, an interest rate (%) and the length of the payment period. Once agreed upon, the payment plan will be ready to be approved with a vehicle sales bulletin legally linking the parties to their financial obligations. Down payment paid at the beginning of the payment contract. Recommended to be 10% to 20% of the purchase price. Co-Signer – Also known as “guarantor” and is someone who guarantees payment of the loan. Interest rate – The cost of borrowing. Variable rate depending on the borrower`s credit rating (see current interest rates). The best place to apply is to find the lender who is willing to give the best price. It is often online where your profile and conditions are posted to banks nationally.
The interest rate is determined by two factors: the value of the borrower`s credit and the down payment. The higher the two positions, the better the chance of a lower interest rate.