So you have decided to buy that long awaited new car, or perhaps for the less luxurious person, a second hand car. The budget is tight but you have done your calculations and know that it would be cheaper to buy the car than to constantly use public transport. Life would be easier and better once your dream car is in your garage.
The next logical step is to get financing. You have researched and weighed the options between taking out a loan and getting auto finance.
The question is – what is auto finance and how can you guarantee that it will not have adverse affects on your personal budget?
Auto finance is traditionally financing that you get from a car dealer. It is often said to be cheaper than getting a bank loan. The interest rates on bank loans can get higher than those obtained from an auto-financing dealer. There are many car dealers who will readily assist you in getting the right kind of financing for your car.
The rates are competitive, as each dealer wants to get as many cars sold as possible. Nowadays even if you have immense amount of debt or have filed for bankruptcy you can still be eligible to obtain auto finance for your car. Auto finance works the same way bank loans do. It is, after-all, a loan that you are taking from the car dealer.
Indeed, purchasing a car cannot get any easier than this.
Technology, however, has also made it possible for individuals to get loans for auto finance using non-conventional methods, such as the Internet. Here you do not need to go to a dealer to get an e-loan. You can normally apply over the Internet and get approved within as little as 15 minutes, some companies claim.
All in all it depends on whether or not you want to pay the instalments every month. Remember to read the fine print; it can save you from making a $10,000 mistake. Buying a car is a big decision, which will have an impact on your personal finances, so you need to be wise. Check out companies until you find one that will best suit your needs, whether it be online or at a local car dealership.
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Written by: Sarah Thomas
Your car is one of the most expensive purchases you will ever make. Probably the only thing you will buy that costs more than your car is your house. You wouldn’t just accept the first mortgage you came across, and likewise you shouldn’t just accept the first vehicle financing option that comes your way. You will have a lot of options in how to finance your car.
You can buy the car outright. If you would like to opt for this, you will need to borrow the cash in the form of a bank loan.
This should generally be medium term, over period of about two to five years. It is generally not advised that you secure borrowing over your home but this may be necessary in order to get the loan or in order to get a better rate. Shop around for the best rate, from banks, other lenders and also on the internet. Rates will vary widely so it is a good idea to shop around as much as possible.
If buying the car outright in this manner is not an option, you may wish to consider leasing the car. Leasing will never make you the owner of the car. You pay a monthly fee, every month for the period of the lease, and at the end of this period, you give back the car and walk away. Leases have a number of advantages over buying the vehicle. The payments are generally lower as you are not paying for the entire value, just for the price of leasing it.
You also don’t have to worry about selling the car when the leasing period is over, as the dealer owns it. Leases may also include a buying option at the end of the period, which will allow you to buy the car if you want to. The one thing to be careful about when leasing is that there may be heavy penalties for early termination.
The other popular type of vehicle financing is dealership financing. With this option, the car dealer arranges the car financing. They will sometimes offer very attractive rates as they want to encourage people to buy the cars, however, sometimes their rates are extremely bad and you will want to be familiar with what’s available from alternative sources before opting for dealership financing. Some advantages of dealership financing will include convenience, multiple options, and special offers on selected models.
About the author:
Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk / and also http://www.ukpersona lloanstore.co.uk. Select Loans have information and links to certain suppliers in the car loans section of the site.
Written by: Joseph Kenny