Why Car Loans Aren’t as Bad as You Think
Car loans are often considered a bad deal, but there are a few reasons why they are not as bad as you might think. These days, few people have the resources to pay the lump sum amount required to purchase a new car outright, but there’s little doubt that new cars are more affordable than ever before.
As car finance organisations, such as DreamLoans, are taking advantage of market forces and offering more and more competitive deals, car loans are worth a second look.
Below are a few reasons car loans aren’t as bad as you think – and a few tips on what you can do to ensure you get the best deal possible.
Shop Around and Do Your Research
Car finance companies know most people would prefer a newer vehicle. They are beginning to offer more and better financing packages – and the more options there are out there, the better it is for you as a buyer. Don’t be afraid to shop around for the best deal for you, and look at more than just the interest rate. Consider the loan term and the residual payment. With a few clicks of your keyboard, you can do research that saves you money and end up with less outlay, more cash in your pocket, and/or a better vehicle. Most car loan finance companies are happy to negotiate, so don’t be afraid to ask for what you want. It’s a competitive market for buyers, sure, but that means there are also a lot of lenders who want your loan.
The Best Deal
Getting the best deal for yourself in terms of the car loan is certainly important, but don’t forget about the car. With careful research and clever negotiating, it’s likely you will be able to afford a better car than the one you may originally have had in mind. This might mean it’s a newer car or one with slightly better safety features, like rear parking sensors. Or perhaps you can save enough to increase your insurance coverage. Whatever the case, there’s little doubt that, in today’s competitive car loan market, you can sweeten any deal you get and this can mean a sweeter ride all around.
Save Your Cash
One of the biggest benefits of a car loan is that it saves you from using up all of your ready cash. If you’re buying a $25,000 car, for example, and you take out a loan paying $1,000 a month over three years, while it’s true you are paying far more than the ticket price in total, it also means you do not have to pay out a $25,000 lump sum right away. This allows you to use your savings for other things, such as a holiday or an investment.
Car loans are known for high interest rates and short loan terms. Car loan companies used to have a reputation for inflexibility and repossessing vehicles, but that is no longer the case. With car loans so common these days that most dealerships offer them directly to car buyers, the types of loans and conditions under which a car loan can be offered have relaxed a lot.
What do you think of car loans? Share your insights in the comments below.