Purchasing a car has become easier now, due to the availability of many
finance options. But make sure you choose an affordable option.
There
are different avenues from where you can buy your new car, like the dealers, at
auctions, or by looking at some classified ad. In all the above cases the
common thing is that you will have to take out quite a huge sum of money to pay
for the price of the car. Having the appropriate funds is the most important
thing, as if you want to pay all the money by yourself then you will have to
see how much money reserve you have with you. If you are purchasing the car
from an auction, then you will have to transfer money online, and for that you
will need to have a Paypal account. Staring an online account will take several
days time, and till then you cannot take part in any bidding.
If
you purchase the car with your own money and no financial help from auto loan
companies, then you will not get any warranty for the car that you have bought.
So, if there is any mechanical problem with the car, then you will have to bear
all the expenses. But in the other case, where you purchase your new car from
the dealer, the car will come with a warranty of three months. The advantage of
having the warranty is that you don’t have to pay for the repairs if there are
any within a duration of three months. If you are purchasing the car using
dealer finance, then they will check the car, and make sure that the quality of
the car is good. So, in this case apart from you, two more people are looking
for a good car for you, one is the finance company, and the second is the
dealership himself.
If
you finance your new car, then there are several advantages. The financial
adviser will give you many professional advises, which will benefit you a lot.
As the deals can be complicated, the financial adviser will make the whole
process easy for you. You can find a friendly loan adviser online also, and
they make the guidelines of auto finance easily accessible and understandable
to you. These online advisers will tell you about the different deals that you
can get, and they will also make clear all the points that you may not
understand. If you want to use your finance efficiently, then it is imperative
that you take the help of a financial advisory.
You
should compare between the different finance companies, and see who is giving
you the best deals. When you go to a car dealer, they have tie ups with certain
financial institutions. They will be able to give you attractive interest
rates, and you should check out this option also. Approaching the car dealer
for loan options is a good idea, as then you can negotiate better on the cost
of the car, and the rates applicable to you. Another benefit is that all the
tedious paper work will be handled by the car dealer itself, and you do not
have to spend your time in all this.
If
you want to reduce the interest rates considerably, then the thumb rule is that
you should make very high down payments. If the initial sum invested from your
side is very high, then you will take less amount of the loan, and the interest
rates will come down too. You should also compare the loan rates between
different banks, before you take the final decision. You should get all the
important information in writing, so that later on there are no disputes. Just
remember to make sure that you are getting the lowest possible interest rate,
as this will give you the option of paying less towards loan repayment.
Reading
between the lines is also very important. They might be charging low interest
rates but they might take extra penalty charges, like a prepayment of loan,
annual fees, charges for not paying an installment, establishment charges, etc.
So, read all the terms carefully before signing the document. Moreover, make
sure that you get a car insurance, which will meet the expenses in case of any
mishap.
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