Obtaining Financing for Your New Car
For individuals who are looking to buy a new car by making use of a financing option, one of the main things to ensure is that one should first make arrangements for financing the new car purchase and then visit the dealers in the city for that particular car. If one is going to go for a financing option with the same dealer who is selling the car, then they might be taken for a ride. The interest rates charged by these car dealers on their financing options is far higher than the interest rates charged by a private or a public bank or a non banking financial institution. These car dealers make only a slight profit in actually selling the car buy they make a killing by asking their customers to opt for their own financing option by providing attractive gifts up front.
One important factor that determines the interest rates charged is your credit rating. A person with a good credit score is very likely to get financing at lower interest rates. If the financial institution doesn’t take in to consideration the current credit rating, then it is better to move to a different provider, which gives preference to those individuals with a very good credit rating.
Before actually deciding on the financing provider, one has to compare the services offered by different providers and then take a call based on the interest rates and low processing charges. Some institutions really make a killing by charging exorbitant fees as service charges. It is better to compare the processing charges of different service providers along with the interest rates and then select a financing option from a particular provider.
Opting for a new equity loan is another good option that is available for financing the new car purchase. A recent survey finding has indicated that a higher number of working professionals opt for a home equity loan to finance their car buying than ever before. It’s always better to go for a higher down payment rather than a higher monthly loan repayment.
As far as possible, one has to draw the amount from different resources and make a substantial amount as down payment. This will reduce the burden when paying the monthly installments. Monthly installments can also go up in future as the interest rates are floating interest rates that may increase in the next year. There are fixed interest loan options that come with high initial costs.