How to find the auto financing you need to buy your next Toyota.
Let’s take a look at all the finance options available to decide which one is right for you.
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What types of Toyota car loans are available?
Several finance options are available to help put you in the driver’s seat of a Toyota:
- Financing from Toyota. If you’re interested in a new car and want to buy it from Toyota, you’re in luck. You can apply on the Toyota website to see if you can be preapproved, then take that offer to a certified Toyota dealer to complete your purchase.
- Secured car loan. This requires your purchased car to be attached to the loan as collateral. Rates can be lower with your car used as collateral. But that means if you default, the lender can repossess the vehicle.
- Unsecured loan. An unsecured loan doesn’t require a vehicle to be used as security for the loan. As a result, you can expect higher interest rates since the lender faces an increased level of risk.
- Car lease. Instead of owning this car, you’re essentially borrowing it by making monthly payments. At the end of your lease you have the option of buying the car, or trading it in for a new lease. There are restrictions on mileage and car maintenance.
- Dealer finance. You could also get Toyota finance from a car dealership. This is a convenient option because you can sort everything out — insurance, registration, license plates — when you buy the car. Loan terms are generally three to seven years and require a large down payment.
Compare car loans to buy your Toyota
How much do popular Toyota models cost?
Once you’ve settled on Toyota, you still have to pick the model that suits your tastes, needs and price range. Below are the more popular models people choose from. We’ve gone with the new car prices to keep things simple, but remember: you’ll always be able to negotiate at the dealership, and it’s usually cheaper to go used than new.
- Camry. Camrys have been dominating the family sedan market for decades. Because of their overall popularity, it should be easy to find a model that suits your needs. A new 2018 model will cost about $23,495 before you start adding features.
- Corolla. Corollas are one of the most popular Toyota models on the market, so you should expect to pay at least $18,600 for a basic package.
- RAV4. The RAV4 provides drivers with a stylish, compact SUV. Although the earlier generations are largely still available used, picking a new one off the lot will cost about $24,510.
- Tacoma. The Tacoma is a classic midsized truck built for off-roading and highway driving. If you’re interested in buying one, expect to spend $25,200 on a basic 2018 model.
- Highlander. Toyota Highlanders are a good value for midsize crossover SUVs, and you can buy one new for as little as $31,030.
- Prius. Perhaps the most well-known hybrid out there, you can drive away in a Toyota Prius c for $20,630. If you’re looking for a model with a bigger engine, consider picking up a Prius for $23,747 — not bad for a hybrid that helps create market standards.
- Yaris. The 3-door models start at $15,635. If you want a little more legroom for your backseat, the 5-door models start at $16,760.
- Sienna. The only minivan you’ll find with all-wheel drive, you can purchase a 2018 Toyota Sienna for your family for as little as $30,750.
Keep in mind that the Prius isn’t your only option for hybrids. If you’re willing to spend more to go green, then you’ll be happy to know that Toyota offers some of its most popular models as hybrids, including the Camry, RAV4 and Highlander.
6 details to consider when comparing your finance options
Make sure to keep the following features in mind when weighing up the pros and cons of different finance options:
- Total cost of the car. Don’t just look at the interest rate when comparing car loans. Get a much better idea of how a loan stacks up by taking into account the interest rates and fees to determine the total cost of a loan.
- Loan term. Terms usually range from one to five years for fixed rate loans and up to seven years for variable rate loans. How long your loan is determines how much you’ll pay in interest — the longer the loan, the more interest you pay.
- Interest rate. The interest rate affects your regular payment amounts and the total cost of financing. Rates vary depending on the financing option, your creditworthiness and your lender. Shop around for a competitive rate.
- Fees. Be aware of any fees that come along with financing a car, including upfront application fees and any ongoing monthly fees. Also find out if you’ll be charged a penalty for missing a payment or repaying your loan ahead of schedule.
- Loan amount. Check the minimum and maximum loan amounts that apply — will the amount cover how much you need for your car purchase?
- Payment schedule. Make sure the loan you choose has a flexible payment schedule and that the monthly payments fit in your budget.
What do you need to apply for Toyota financing?
Once you’ve settled on the right finance option, it’s time to get going with your application. Before you apply, it’s important to check that you meet loan eligibility requirements, such as:
- Be at least 18 years old
- Have a good credit history
- Satisfy minimum income requirements
- Live in the US
You’ll also need to provide supporting documents, including:
- Proof of ID. A current driver’s licence or passport will do the trick.
- Financial information. Provide proof of income (such as paychecks and bank statements) and details of your credit history, including any outstanding debts or liabilities.
- Vehicle information. Details about the car you plan on buying, including its make, model and purchase price.
Tips to help you get the best financing
Before choosing a loan for your Toyota, make sure know how to find the best loan for you. Some key points to keep in mind are:
- Check payment flexibility. Some finance options either won’t allow extra payments or charge a fee any time an additional payment is made. This can bump up the total cost of your loan, so remember to check the loan terms and conditions before you apply.
- Shop around. Interest rates and loan terms vary depending on the location of the dealership and the inventory on the lot. Your best bet is to browse the internet for dealers specializing in Toyota and reaching out or visiting to see what they can offer.
- Prepare for negotiation. Do some market research to get an idea of the price range of the car you want. You should also shop around for a few different car loans to see who offers you the best rates and terms when it comes to financing. And the most fun part of buying a car is haggling down the price with a salesman.
- Try getting preapproved. If you go car shopping with a preapproved loan, you’ll already know exactly what’s in your budget. This will save you time and give you negotiating power because the dealer will likely try to compete with your current offer.
- Pay close attention to special offers. Just because 0% APR is plastered on the window of a dealership, doesn’t necessarily means you’ll qualify. However, if you do, read the terms and conditions and see how long the 0% offer lasts and what the interest rate reverts to after that time period is up.
Bottom line
If you’re planning to purchase a new Toyota, there are plenty of finance options available to help get you in the driver’s seat. Just make sure to compare your options and research any terms and conditions attached so you end up with the loan that works best for you.