In Need Of A New Vehicle? Beginner's Guide To Auto Financing Options
If you are in desperate need of a new vehicle because your old one is no longer roadworthy, you may be a bit anxious regarding your options in how you would pay for a replacement. If you have never bought a new car before, the jargon used can be a little confusing, making it necessary to bone up on the lingo before you walk into a dealership. If your credit is in good standing, there are a few options available to you so you can obtain a vehicle right away. Here are the financing options available for those who need to buy a new vehicle.
Direct Financing
Financing the amount needed for a vehicle can be done by going to a bank or credit union to obtain a personal loan to use for the purchase of a new vehicle. When financing on your own, you will have the flexibility of checking out different banks for the best terms and rates for your specific situation. You will be expected to make monthly payments that include the finance charges agreed upon when you sign the contract. A positive point in choosing to directly finance a vehicle is that you will know in advance how much you will be paying monthly for the loan. This can help you choose vehicles that are within your spending limits.
Dealership Financing
When you go to a dealership to look at new vehicles, you will have the option in purchasing the vehicle on the spot by using financing through the dealership itself. This option is favorable for those that cannot wait for a loan approval through other establishments, which can sometimes take a few days. Financing through a dealership gives you convenience, as all the paperwork will be done right after you choose a vehicle you want to buy. Most dealerships have a few banks they deal with, making it possible to get a favorable rate. Dealerships also offer special incentives to get buyers to use them for financing. You may be able to get a lower price on a vehicle by paying a larger down payment or holding a shorter term on the loan.
Leasing
When you lease a vehicle, you are agreeing to use it for a set amount of time and drive it within limitations on mileage. At the end of the lease term, you will return the vehicle to the dealership. Many dealerships will offer the chance to buy the leased vehicle at the end of the duration of the lease. Lease payments are often less than the amount you would pay when buying a new vehicle. If you drive over the set mileage, you will need to pay a fee to the dealership.
Leasing is a great option for those that wish to change their vehicle every few years, as well as those than cannot afford new car payments.The downside is there are end-of-lease fees to pay when the term is completed, as well as fees to pay if you decide to terminate the lease early. Contact a company like Hart Fullerton Leasing for more information.
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