Automobile industry is undergoing drastic changes every moment. There is a never before demand for new automobiles. The result is that many new models are getting introduced every year. Auto finance lets you own an automobile.
There are many ways of financing your automobile:
a) Through banks/ credit unions/financial institutions: a large variety of auto loans are being offered to customers by banks and financial institutions. The eligibility criteria are good credit rating and a steady employment. Loans are available at cheap rates. Depending upon the price of the vehicle, auto loans are available for up to 6 years.
b) Private lenders: private lenders are good options so far as bad credit holders are concerned. But the terms and conditions proposed by these lenders will be very stern and strict. Higher repayment rates and high interest rates are other characteristic features of these private lenders.
There are secured auto loans and unsecured auto loans. A person having good credit history will probably find it easy to get an auto loan. Securing the loan amount against any property may further increase their chances of getting a loan. Although the loan has already been secured with the vehicle, the later method is suggested when the borrower involved is a large business needing not one but several automobiles. Unsecured loans do not require any security. But they demand good credit history. Also, when compared to secured loan, the terms are less beneficial.
It is desirable to approach a financing institution so as to secure the finance required for purchasing the automobile. Next, it’s the turn of the automobile dealer. The fact that you already have the money lets you have a good bargain. In this way, the purchase cost can be reduced a little. Approaching a dealer in the beginning itself is not advantageous as the dealers might be having affiliations only with some financial institutions. This makes the purchase costlier both in terms of the cost of the vehicle and commission charges.
Options like leasing are there for those who can’t afford to purchase the automobile in the beginning itself. Options like Commercial hire purchase and lease purchase lets you lease/hire the vehicle for a term period and then eventually own it at the end of the term.
The process of comparing lenders helps you get a cheap auto loan. A lender is supposed to have the following qualities.
They charges for your loan including the interest rate, fees and any extra charges. Check out whether the interest rate of the lender is far higher than the general interest rate in the market. If so, better skip such lenders. If the lender doesn’t provide a list of all their fees or/and are charging enormously (including any hidden charges) then it is better not to get into that deal. To satisfy the demands of various customers, the lender must have a variety of loans products on offer like high interest loans, cheap loans, low initial payment loans and longer term loans. Then there are bad credit auto loans with good deals. Make it obligatory that you should get your doubts cleared and that the lender is not pressurizing you to accept the loan. Always prefer a lender who offers the most flexible options available. Many automobile companies now offer strong finance deals
Look for any extended warranties and free maintenance options. Even free fuel for the first year is being offered by some automobile manufacturers. Making the right choice is solely a thing which is up to you.