Financing a New Car Purchase
Buying a car can be the second biggest expenditure you will make after a home. Therefore, as important as getting the right make and model of a vehicle, choosing the right financing option must be carefully taken into consideration. Some car finance plans are quite complex but after a little time studying them, you will eventually learn the key benefits and disadvantages of each.
There are three main car financing options available to you, and these are an auto loan, lease and cash.
Paying cash for your car will make the transaction very simple. It removes several variables from the negotiation process including down payment, interest, and monthly payment. So all that remains for you to do is to negotiate the price and pay the dealer outright. Buying a car in this manner can get you great savings on your purchase as the dealer cannot disguise the true value of the car.
It must be noted, however, that buying a car in cash does not mean that you have to finance the purchase directly from your pocket or bank savings.You can apply for a loan, which will be issued either in the form of a check or a bank draft, from a lending institution to pay off the car dealer. Your lender will then hold the car's title until you have completely paid off your loan.
On the other hand, buying a car through a dealership loan or auto loan can be arranged through your dealer's lending institution.Since the dealer will directly finance your purchase, you do not have to go through the hassle of applying for a personal loan from a bank or any other financial institution. You need to check all the details of the deal, however, to ensure that there are no hidden charges.
As for the lease, usually a lease would be just a lease, but there are companies that offer a "lease to own" option. However, leasing a car which you intend to purchase in the future is not a smart option. This is because leasing one can cost you more than buying one outright.
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Unit 2a, Knowles Industrial Estate, Buxton Road, Furness Vale
High Peak, SK23 7PH
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