Car Financing | A Quick and Easy Explanation

Stop guys ye cars here and in today's you'dbe talking about car financing this is something that like every single person on the historyof YouTube with thinks they know about money I mean a lot more than I do like literallyevery YouTuber covered this topic and I feel like they covered in like the most boringis monotonous way it was actually watching some of these YouTube videos and guys likewelcome to my car video about talking about car financing today it just a boring topicI'm going to keep it as boring as possible even watch it for more than like 5 minutesand it was really good actually really good video how to explain it in when it's a gooddeath but I just so boring so this point of this video is try to explain to you guys anda simple and is easiest way to understand as possible so let's get into it so far isbasically there's three different ways you can buy a car when you go to the dealershipor when you by Adele Someone basically the first as you pay upfront with cash usuallynot the best idea next is you lease the car and then the other one is financing how doyou say there's pros and cons to financing and Leasing and I'm going to probably do anothervideo talking about losing but to keep it short and simple for this video we're justgoing to stick to the financing so when you finance a car there's three main things youhave the interests of your down payment and then you have the term so all of these combinedtogether basically give you a monthly payment that most of you are familiar with a lookat it so when you go ahead and things you can do you can Finance it to the dealer oryou can Finance it through your Bank East places to give different interest rate inmy experience I've had dealers give pretty good interest rates and I have a feeling it'sbecause they kind of want to sell you the car so they're more incentivised to give youa lower percent interest and if you think about it you know the dealership is givingyou like 2% interest and they sell you the car versus you know you don't buy the carbecause the bank gave you eight of course it's dealerships going to take that risk goingto give you a loan at 2% interest cuz once they sold you the car into the actual making2% off that I know some of you might be wondering what's a good interest rate and interest ratesgo from all the way from 0% all the way to 20% and usually you 0% interest rate on newcars and this is because dealers want to sell you the car and they're like hey look 0% interestif you have 20% music guys what do I do and everyone just like she kidding me 20% interestwhat are you thinking 40% interest on a car how bad was it as credit but in general anythingabove a 10% interest rate is but in general anything above a 10% interest rate is prettybad and anything less than 5% on a used car is really really good at anything less than3% on a new car is pretty good now let's take a look at the down payment so this can besplit up into a couple of different things but keep it simple just going to go over thevery basic understanding so the down payment is how much you put on the car which willchange your monthly payments the more money you put down the lower your monthly paymentso in general people recommend putting around 10% or so are some of the car's value as adown payment so if you have a $50,000 car your paying around 5 grand down payment initiallyhowever it really berries to paste on your interest rate if you have a low interest ratelike 0% then I say put no money or as little money down as possible because your moneyis better spent somewhere else where as if you have a high interest rate anywhere betweenlike 6 and 7 probably try to put more money down okay so I just wanted a video of someof you might be like hey I'm kind of confused like interest rates there's down paymentsthere's percentages there's numbers can you do an example do you need a number for youguys and I'm going to try to make it as simple and as easy to understand but I have one morething to go over I'm going to be going over the long-term the long-term is basically howlong you going to take to pay off the amount that you finance in general it's like oneyear 2 years 3 years for 5 69 420 although most paying turn dealerships aren't goingto offer you more than like 10 years Finance with the average being like 45 and sometimesthey do like 12 months 24 3648 60 months actually most of the time they do like month I don'tknow why it's probably good reason for it I'll get how does it all kind of tie in witheverything else the longer-term is the last you're going to pay for the car the shorteryour term is the more you're going to pay monthly for the car however the only problemwith a higher term or long-term is that you can be king Morty interest and if you're confuseddon't worry I'm explaining it right now it's kind of hard to like conceptualize in my headas I'm explaining that even if I understand it so I'm going to do an example of rightnow something I forgot to explain is what happens if you trade your car in and justto keep this video just about financing and down payments I'm not going to go over itif you have any questions let me know in the comments and I'll gladly answer you guys dobefore we look at the example is that you go and you Google car payment calculator gofind out what number is your down payment your interest rate whatever it whatever numbersthat you get from the dealership put put these numbers into the calculator andsee for yourself 32 examples animals going to do these examples to kind of show you whatI meant by you don't give a higher interest rate is kind of bad to have a longer-termif you have a lower interest rate is okay if you have a longer-term because you're notpaying as much money to interest so now let's say you're someone who is kind of bad credityou get a 10% interest rate and it's a $35,000 car or putting down 10% Like I mentioned beforewhich is $3,500 so how much do we pay weekly around seven hundred something $8 a monthbut the biggest thing is we should look at the interest rate over 60 months we're lookingat $9,200 and interest which to me is crazy now let's see what happens if you have goodcredit if we only change the interest rate from 10% to 3% are monthly payments go downat $600 a month and we're only paying $2,600 a month which is nearly seven thousand dollarsare paying less or five years just because of interest that it guys that's all for today'svideo I hope you enjoyed it if you did consider subscribing drop a comment with what you likeabout this video and want you didn't like I'd appreciate all your feedback what's asimple stop with the too complicated did I ramble on too much do you guys want some morememe I don't know let me know what you guys want to see in the comment and as always I'llsee you guys in the next one.

Source: Youtube