Most people do not have sufficient money to buy a new car. Sometimes it may be profitable to them when is easy to borrow the needed finances, or decrease the transportation expenses or a lucrative investment. The following are the different sources of auto finance.
- Auto dealerships: Dealer financing is one of the most popular methods of financing. The buyer can get the finance from dealership itself. In most cases, the dealer’s finance rates are lower than those of banks and credit unions and other sources in the market. Some schemes like zero percent interest financing offered in United States, and in other countries for a specified models. Financing from a dealer can be fast, convenient and sometimes may competitive. But these are high pressure and the payments on loans are high in the beginning.
- Banks: Banks offer auto loans based on the credit score. The main advantages with the bank loans are simple interest loans (which provides even interest throughout the loan term), disability or life insurance with loans, personal services and competitive rates. But the convenient is not as much as a dealership, because you need to get only within the bank working hours.
- Credit unions: The credit unions are widely popular as cost effective automotive loan sources than the banks and other financial institutions. Because there is a facility to negotiate on large scale basis for its members. These are even provide the information on about the vehicle and other relevant. Credit unions provide cent percent financing.
- Online financial institutions: Getting finance from a online finance institution is easy. It can be quick and usually more competitive rates. The major drawbacks with this option are easy to scam, we don’t know with whom we are dealing for the loan, and it is not a personal service.
- Home loan equity: For financing a new vehicle, home loan equity is a cost effective way. The interest rates in this method are lower than any other type of loan except zero percent financing. These offer tax benefits, which is a part you are paying as interest on the loan. In this method, you will tying your house with your vehicle. This may risky in the future.
- Friends or family members: Obtaining a loan from friend or family member is somewhat a good thing. You can get more personal service than any other type of loan source. Usually they will offer at competitive rates, easy to obtain the loan and sometimes it is flexible too. The problem with this is, when any incident is occurred, the relationship between you and the finance provider might be in dangerous.
Research for the interest rates and flexibility for you and find the best suitable one for you. Regardless of the source you are going to get the loan, it is better to obtain approval in advance for the vehicle’s finance amount.