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The Basics of an Auto Loan: Navigating Your Path to a New Ride

Female customer receiving car keys, shaking hands with saleswoman. Focus on saleswoman.

Embarking on the journey to purchase a vehicle should be a positive experience. However, the path to car ownership often involves navigating the world of auto loans. Understanding the basics of an auto loan is crucial to making informed decisions and finding a deal that suits your financial situation. At Ontario Auto Center, our 19 brands are here to help you find the best vehicle & financing option to fit your needs.

What is an Auto Loan?

An auto loan is a financial agreement between a borrower and a lender, where the lender provides the borrower with the funds to purchase a vehicle. In return, the borrower agrees to pay back the loan amount plus interest over a predetermined period. Auto loans can be secured through various financial institutions, including banks, credit unions, and auto finance companies, making the dream of owning a new or used car accessible to many.

Understanding Auto Loan Terms

Before diving into the search for the perfect off-road SUV, hatchback, pickup truck or sedan, familiarizing yourself with common auto loan terms is essential. Here is a glossary of terms you may encounter:

Principal: The total amount of money you borrow.

Interest Rate: The cost of borrowing money, expressed as a percentage.

Term: The length of time you have to repay the loan.

Monthly Payment: The amount you pay each month, including both principal and interest.

APR (Annual Percentage Rate): A broader measure of your loan’s cost, including the interest rate and any other charges.


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Choosing the Right Auto Loan

Navigating auto loan options in Ontario, California, and the broader Inland Empire can be daunting. However, understanding your needs and financial situation can help you choose the right option for your unique circumstances. Here are some factors to consider:

New vs. Used: Decide whether you’re in the market for a new car or a used car. Used cars often require higher interest rates compared to new cars but can be a more affordable option overall.

Loan Term: Longer loan terms mean lower monthly payments, but more interest paid over the life of the loan. Aim for the shortest term you can comfortably afford.

Interest Rates: Shop around to compare interest rates from different lenders. Your credit score will significantly influence the rate you’re offered.

Tips for Auto Loan Shopping in Ontario, California

Check Your Credit Score: Your credit score plays a crucial role in determining the interest rate you’ll receive. Ensure your credit is in good shape before applying for a loan.


Do you have bad credit? See how we can help.


Budget Wisely: Determine how much car you can afford, including monthly payments, insurance, maintenance, and fuel costs.

Online Tools and Resources

Leverage online tools and calculators to estimate your monthly payments and compare loan offers. Websites like Edmunds and Kelley Blue Book offer valuable insights into car values, and more, helping you make an informed decision.

Final Thoughts

Securing an auto loan is a critical step in the car buying process, offering a pathway to ownership for both new and used vehicles. By understanding the basics of auto loans, from the impact of interest rates to the importance of loan terms, you’re better equipped to navigate the financing landscape. Whether you’re in the market for a gas, electric or hybrid model here in the Inland Empire, remember, the journey to finding the perfect car and loan doesn’t have to be traveled alone. Resources are available to guide you through each step of the process, ensuring you make decisions that best.


At Ontario Auto Center we are here to help you. Please do not hesitate to contact us with any questions regarding your financing.


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While great effort is made to ensure the accuracy of the information on this site, errors can occur. Please verify all pricing information with a customer service representative. This is easily done by calling us or visiting us at the dealership.

Customer may not qualify for ALL Rebates shown. Some rebates are stackable and others can and cannot be combined. See Dealer For Complete Details.