Owning a car is one of the most common dreams amongst Americans but finances always provide a major hurdle. Everyone wishes to have their dream car. In the process of owning a car, the greatest challenge is never the
type of car to buy, or where to get the finances but the automobile financing. Hence, financial limitations is a major hindrance to attaining this life dream. However, you can opt for various car loans available in the financial market to attain your dream car.
Dealership Financing
This is where car dealers offer solutions for new and used cars through lenders. Basically these dealers will be offering applied car loans to these lenders on your behalf. It is a convenient option but, beware of dealers who might be charging high interest rates. Also, look out for notorious red flags that have become common among dealers.
Personal Loans
Banks and other financial institutions are always handy when it comes to provision of car loans for any purpose. This offers another ideal car loan option because it works best for loans not exceeding $15,000. Facilitation of this kind of loan will follow the normal loaning process depending on your finances as worked out by your lender.
Leasing
This is perhaps the cheapest option of car ownership because you will only be required to pay for using the car meaning that your monthly payouts will be much lower. This also means that you will not be required to make any down payment and the lease agreement will normally be over in only three years, and you have an upper hand whenever you want to activate the ownership clause at the end of the lease agreement.
Equity Car Loans
This is another car loan option but works for those people with valuable and tangible assets like homes. This property is meant to act as loan security but it is well advisable to have other reliable financial sources to avoid loss of property. The one advantage is that equity loan rates are low.
Choosing the Best Car Loans Option
After exclusively studying the available options, there are other factors to be considered so as to end up with the most suitable car loan.
1) Loan Term: –
Long term of loan means smaller payments but more interest rates. Choose an option that gives you the best value for your car to avoid dragging your loan payment to long after car life.
2) Interest Rates: –
The amount of interest rate charged depends on loan amount, credit status, and financial situation. To pull rates down, pay a huge down payment and your interest rate charge will automatically come down.
3) Clauses: –
Carefully evaluate all clauses within the loan agreement to avoid unforeseen financial battles.
4) Charges and Fines: –
Choose that lender who offers you the option of making early loan repayment without extra charges.
5) Annual Percentage Ratio (APR): –
It is advisable to study the total amount of annual payment including both fees and interest charged other than dwelling on what you are paying monthly. This will provide you with an edge when making the ultimate decision.
With all these available car finance options; there is definitely one or two that suits your financial situation. After, an in-depth evaluation and consideration you can opt for the best and convenient auto financing plan.