Understanding APR

In order to understand the terms of your car loan, you must be familiar with the terminology used by lenders. You will hear “APR” being thrown out a lot when discussing loans with a dealership. APR refers to the “annual percentage rate.” It expresses an interest rate in terms of the whole year, rather than on a month-to-month basis or in reference to the term of the loan.

The majority of people need a car loan to pay for their new or used car. Before you go to the bank, consider financing directly with the Austin used car dealership Chapman Motor Sales. We provide in-house financing at all 11 convenient locations in the Austin area.

You can save a great deal of money using in-house financing, especially if you have a credit score that causes banks to assign you high interest rates. We develop a personal relationship with you, and it helps tremendously to build a relationship with your lender. We work closely with our customers to help them to get into the car they want at a payment they can afford. Visit one of our 11 locations or browse our inventory online today.

Two Types of APR

APR is typically expressed in one of two ways:

Nominal APR – Calculated by the basic interest rate multiplied by the number of payments per year. This is an easy number to understand, and can help you make a decision as to whether or not you believe this is a loan you can afford.

Effective APR – This is a slightly more complicated form of APR. It factors in many fees that may affect the overall percentage rate, such as service charges, late fees, and loan origination fees. Factors will vary from lender to lender.

Contact Us

A low APR is ideal. At Chapman Motor Sales, we work hard to ensure car payments are fair, that you are getting the most out of your vehicle, and that your APR remains low. We put our customers first and are ready to answer your questions. To find your next vehicle, visit one of our 11 locations in the Austin area or browse a complete online inventory today.