Getting enough funds to purchase a car for business or personal use may sometimes be difficult. The good news is that there are several banks and financial institutions always willing to offer credit facilities both to businesses and individuals.
Below are 7 ways to finance your car:
- Savings
This is one of the best ways through which you can finance your car purchase. However, it requires maximum discipline in order to save enough money to buy a car. You can decide to come up with a savings plan and target a certain amount of money by the end of a few years.
Saving to purchase a car requires a lot of short-term sacrifices. For example, you will have to forego certain privileges to be able to save a substantial amount of money. Besides that, you need to exercise a high level of discipline in terms of saving.
- Shop for car loans
A loan is one of the common ways most people use to purchase their cars. If you have decided to take a car loan, it is important to go for loans that attract low-interest rates. There are a number of financial institutions that offer different types of loans to customers.
The first thing you need to do before you even visit a bank is to understand the type of car that you want and how much money you are able to repay every month. Understanding the amount you can pay monthly will help you decide on the type of car you can purchase through a loan.
- Sell your old car
This is also another way through which you can finance your car purchase. If you have an old car that’s not serving your current purpose, the best way is to dispose of it and use the money to buy a new one.
There’s a likelihood that the money from the old car won’t be enough to by a new model car. You can decide to add the extra cash or request for a loan from a friend or any financial institution. Take time before you sell your old car so that you can get the best deal.
- Use a car loan calculator
It is always good to compare different lenders before narrowing down to a specific one. However, that should not be used as a substitute for a car loan calculator. The good thing about a car loan calculator is that it will keep you on the loop when it comes to fees, charges and repayment amounts.
It is vital for every borrower to understand the dollar amount so that you can determine what you can afford and repay every month.
- Get on the phone
After you have narrowed down to a few lenders, it is time to talk to each one of them. It won’t cost you anything to talk to every lender. Talking to each lender will help you understand their terms and conditions for car loans. From there you will also know which lender appears easy to deal with and offers affordable interest rates and flexible repayment periods.
- Look out for discounts
Some banks and financial institutions do offer loans for a certain type of cars. For example, some of them work with clean energy companies to offer discounts on cars that are environmental-friendly.
This is something to consider when shopping for a car loan. You can save some bucks and at the same time be environmentally responsible.
- Be wary of dealer finance
Last but not least, it is always good to watch out on cheap interest rates being advertised left right and centre by car dealers.
Dealers who promise cheap interest rates often hide a lot of information from their customers. The deal might appear attractive on paper but when the reality hits – you will end up paying exorbitant rates.
In general, getting finance for cars can be a little tricky if you don’t have the right information. You have probably seen many dealers advertising for cheap interest rates on car loans.
However, it is always good to conduct your own research to get the right information. Besides that, cut your coat according to your cloth to avoid straining your finances.
