October 14, 2016

Car Financing Options to Consider Before Buying

Car_AllowanceMany have been asking the one million dollar question of how they pay for their new cars? Well, this article will look into this topic squarely. There are different car financial options such as:

  • Car loans
  • Car leasing, and
  • Paying cash

This will help you to reduce cost any time you want to go to a car dealer. When we talk about financing in car business, we are merely saying that the car dealer with either leases the vehicle to you or they will give you an auto loan.

The opposite of car leasing is buying the car outright with just one off payment. Although, some people prefer taking a loan from the bank to finance their cars, while a good number of people like taking a loan from the car dealer.

Car allowance options using a calculator

The person desiring to get a car allowance can simply walk inside a car company; choose any car of his or her choice, fill the application form, agrees to the terms and conditions of the car dealer, and drives away with the car. The dealer may charge you high interest rate if you have a bad credit. You can work out your options with a car allowance and calculator to find the best finance available to you.

How to finance your car?

How you will finance your car will depend on your answer to these two essential questions:

  • Do you want to buy the car, and
  • Do you want to lease the car.

We shall discuss these three points briefly. This will enable you to know what you should expect when you go to the car dealership.

Do you want to buy the car?

If you wish to buy the car and you desire that the car dealer will help you in financing it. The car dealer will require you to fill out an application form. Based on your credit score, both of you will negotiate the price of the car and other related expenses such as licensing fees, sales tax and so on.

They will like to know how quickly you will be paying back the loan; some car manufacturing firms would like you to pay back the loan within three to five years. However, the longer you intend to pay the loan, the lower the interest rate.

Don’t forget that a car dealer would like you to pay the large down payment as much as you can. The car dealer will never release the title to you until you have made the last payment.

Do you want a novated lease on the car?

If you want a novated lease on the car, you will be required to complete a credit application form. The dealer will contact some banks on your behalf. Keep in mind that every bank has their own terms and conditions, which both you and the dealer must fulfill.

It is up to you to decide how many years you want the lease. However, experts advise that it shouldn’t exceed three years. Also, you will be required to make at least a small amount at the start of the lease.

Some car dealers will recommend that you don’t drive more than 12,000 miles annually. If you drive more than 15,000 miles per year, it will affect your monthly payments, but the good news is that it will save you some money. After making the final payment, you can decide to buy the car at little amount.