Purchasing a car is one of the largest issue, as it deals with more cost. There are many ways by which you can own a car. First one will be by paying cash, next option will be taking lease. But, some of the people want to own a car throughout their lifetime, but cannot afford. In those cases, people will opt for car financing.
Lot of home work is needed for selecting the best lender for car finance. The interest rates will vary depending on the factors like credit rating, length or time period of contract, car characteristics, location. Interest rates will be high for high credit rating if the car is used car and if the time period of contract is more.
There are more sources which offer the car finance. Apart from the banks, there are many options to get a car finance like dealerships, banks, Home equity loans, online financial institution, friend. But, each and every source has its own pros and cons.
If we take the case of dealership, the car financing will be done very quickly and conveniently. But there are many drawbacks associated with it like interest rates are more during the early stages, so, even if you want to pay the whole amount in the early stages, the interest rates will be higher.
There are many advantages which are associated with the banks like personal service sometimes provide free life insurance or some disability insurance with loans, interest rates are simple, competitive rates etc., But apart from all advantages one main drawback is the convenience. Even the sources like online financial institutions will offer competitive rates. Like the dealerships, online financial institutions are also quick and easy. But the main disadvantage is that it is not a personal service and even some scams will occur because the process done is online. Home equity loan may be risky. Using family member or friend will also create problems. So, by checking out the convenience one can choose car financing according to the need.