APPROVAL-CAR-FINANCE

Nowadays, all major car dealers offer you finance packages along with cars. Most often the car dealership itself offers finance packages. But it is not obligatory that you must accept the finance package offered by the dealership just because you purchased your car from them.

You are always free to take a loan from somewhere else, such as a bank, and pay for the car outright, and then simply make the loan repayments to the bank as with any other loan.

You should be careful to find out exactly how much you are being charged for car finance. The primary way to calculate the charge of any credit is by using the APR or annual percentage rate. This calculates the cost of the loan using a standardized formula and all lenders must use the same method of calculation. However, just because a car dealer’s APR looks attractive does not mean your search is over. You should also, always find out how much the car would cost if you pay in cash. Remember that providing a cash discount is exactly the same as charging extra for credit. If the cash price is lower, then you may be better off getting the loan from elsewhere and paying for the car with cash, this will take advantage of the better price and you will have a smaller amount to pay back to your lender.

The other thing you should look out for is down payments and closing payments. These are payments that are paid at the beginning or end of the term of the loan, and while the monthly payment terms may be attractive, it could well be the case that there are large additional payments to make and you should not forget to calculate these in when pricing the finance.

Car finance can be almost as important as the deal you get on the car itself and you should always regard getting a good deal on the financing as part of the process of getting a new car.

Tags: banks, car dealerships, car finance, finance