Things to Consider Before Taking a Car Loan
You’ve picked your car after months of searching for the right one. The salesman is about to take you through the forms, when the final sales push comes on top of their financing deal. You freeze, you’re not sure what to do – is this setting you back more than you thought?
Car loans can come from a variety of different sources; you should never feel pressured into going with a car loan that you don’t feel a hundred per cent sure about. Cheap car finance deals are all around you; you just need to know where to look.
There are a few things to consider carefully before you take a car loan out. Choosing right will make life with your new car a lot easier.
A dealership loan may cost you more than you anticipate
A car loan from the dealership itself is attractive for a variety of reasons. It’s easy and quick; you’ll be able to sort out a car loan deal pretty much instantly. It’s the most convenient way of getting a car loan. However, beware of the downsides involved.
During the infamous final sales push, the car salesperson will attempt to sell you all kinds of other stuff you probably don’t need with your vehicle. Additionally, the loan you’ll get from them will be front-loaded, with higher interest for the initial months’ payments.
Bank loans are better, but slower
Getting a loan from the bank won’t be as speedy as it is with the dealership. Still, you’ll get competitive rates and a far more personal service. They’ll even advise you if they think you’re paying too much for the car; your bank does look out for you, after all.
Banks are good to approach for car loans because they often throw in some extras like free life insurance, or whatever they feel like. The interest on the loan will usually be split evenly across the term. Still, if time is of the essence, you probably should avoid the bank in that instance, as they’ll take time to process your loan.
Online financial institutions, like dealership loans, are quick and convenient. They will probably offer more competitive rates, too. Unfortunately, a degree of caution is required when exploring loans from these sources, as there are loads of scams to watch out for.
It’s definitely worth shopping around online, though. It’s guaranteed that you’ll find the best deals online, but you need to look hard. If you apply for the loan online and agree to automatic direct debit payments, you may be able to get the lowest rates.