If you are planning on investing in a new vehicle, you’ve plenty of options when it comes to financing your purchase. When you’ve picked out the right car for you, the next step is to find a way to pay for it. If you don’t have cash available, the best way to get the vehicle is to look at a loan. You don’t just have to rely on the dealership, you can get money from a variety of places.
Personal Loan
Most people go for an unsecured personal loan. If you are buying a car from a private seller, you’ll need to borrow money from a bank or an alternative money lender. Because a personal loan is unsecured, most lenders charge a higher interest rate. But personal loans are easier to get, and you can have money in your account 24 hours after your application. If you don’t fully understand the benefits of a personal loan for a car, visit websites and read about their services.
A personal loan is different to agreeing finance from a dealership. The minute you pay for the car, you own it. If you get finance from the dealership, the vehicle isn’t yours until all your payments are complete. This option allows you to buy a used car or one sold by a private seller. In addition, your vehicle cannot be reclaimed.
Car Loan
Another option which gives you access to finance is a car loan. These loans are done through the dealership and they offer a variety of incentives. Although they offer incentives and a low interest rate, your car can be taken off you by the dealership if you default of the loan. It is a specialised type of loan that accepts the vehicle as collateral. If you don’t pay, the only way the dealership can get their money back is to recover the car.
Here are some typical features of a dealership car loan:
- Low interest rates
- Vehicle as collateral
- Fixed monthly payments
Generally, car loans are made to attract customers to new vehicles. They want people to spend their money on the latest model without considering a used car.
Savings
If you have some time to spare and you don’t need a car right away, the best option is to put money aside each month and save for a car. You can set yourself a goal and manage your savings in small amounts. Work out how much you need over a certain period and deposit a specific amount of money in a savings account each week or month. You don’t always have to reach your target, but if you come close, you won’t have to borrow much money when needed.
There are many ways to buy a vehicle, you don’t have to depend solely on the dealership to give you finance. If you’d like to shop around for used vehicle, you can opt for a personal loan from a traditional bank or money lender. Another option is to open a saving account and set up a direct debit from your current account.