Subaru Financing for Beginners

For most people, an introduction to car financing doesn’t come until they set out to purchase their first car. Our Subaru financing team understands this better than anyone, and our goal is to provide a rewarding, hassle-free financing process for beginners. Here’s what you need to know!

Why Do You Need Financing?  

Unless you have a large amount of cash on-hand, purchasing a big-ticket item such as a car will require financing. What this means is that when you decide to buy a car from Serra Subaru Champaign, we loan you the money for the car and then you pay the loan back to us over a set period of time. Once the loan is paid off, you own the car outright.
 

The Four Main Components of Car Loans 

Whether you’re interested in a sedan or a new Subaru SUV, your car loans has four main components. Let’s look closer at each one.  

Loan Amount 

The amount of money you can borrow for a car loan depends on the value of the car you want, and your ability to repay the loan. The latter criteria involves your credit score. The higher your score, the bigger the loan amount, and the better your available rates and Subaru incentives are.

Interest Rate  

The interest rate is the “fee” you pay to us for loaning you the money for the car. This rate is often expressed as an annual percentage rate (APR) — for example, five percent — that’s charged on a yearly basis. For example, if your loan is for $20,000 and you have an APR of five percent, you would pay $1,000 of interest per year.

Term  

This represents the length of time you have to repay your car loan. For first-time car buyers, it’s common to choose a long term (e.g. 60 months) in order to get the lowest monthly payment. However, if you think you can pay the loan off sooner, we advise doing so.

Monthly Payment  

Your monthly payment includes a portion of the loan, along with interest and any other applicable fees. You can reduce the amount of your monthly payment by making a large down payment.  

Still Have Questions? Visit Our Subaru Financing Experts 

Now that you’re better informed about car financing, we encourage you to visit our Subaru dealers in Savoy, IL to continue the purchase process. This includes getting preapproved for a loan, learning about our latest incentives, and test driving your favorite models. We hope to see you soon!