Many people may not bring their dream car home because they cannot afford to pay for the value of the car all in one go. Car finance has made it easy for many customers to buy their dream car. This financing is generally made through financial institutions, banks, and credit cards or through dealership contracts. Some of these financial schemes allow customers to buy a car even with bad credit. Here are a few advantages and benefits of getting a car through various financial schemes:
Buy a better car: Car finance will enable you to buy a better car which you may not otherwise have been able to afford all at once. This requires a small down payment and low monthly payments. If you buy a used car with the money you saved, it may need costly repairs; so it is always better to speculate to accumulate. Taking car loans means you can own a car by paying small payments and the advantage here is you can spread cost of the car over a long period of time and clear this loan with specified monthly payments.
- Low initial interest rate: For the first year many of the dealers are offering 0% finance. You will be able to get receive a great benefit from this initial interest rate; this is one of the advantages of financing with a dealer. Other than low initial rates there are many benefits like cheap insurance cover and warranty services when you finance your car.
- APR: The advantage of buying a car on finance is that the amount you must pay on APR (Annual percentage rate) is fixed throughout the year. You need not worry about higher interest rates and higher repayments. Even if the interest rates have increased on the same car which you have taken a loan out on you will be unaffected. You will just have to pay a fixed amount each month.
- Loan period: Depending on the loan period some lenders offer lower interest rates. If the term period of repayment is longer then you may get lower annual interest rates. You will also pay a lower percentage each year; however this should not be the major reason for extending your loan term.
- Lower monthly installments: Many car financing dealers allow you to pay less on monthly payments. Of course this monthly payment will depend on your credit score and the cost of the vehicle. Paying regular monthly payments will not affect your budget you can pay off your car loan with proper planning and commitment.
- Credit score: This is the most common factor considered by all lenders in approving a financing scheme and influence interest rates. If you have a good credit score then you will qualify for lower interest rates. Remember though credit score is not the standard factor but many lenders follow credit check. Interest rates are not same for everyone; these are greatly influenced by your credit report.
Author bio: Hi this is Simon John Clark. My passion is to write on Finance, Insurance, Travel, Home Improvement and Home appliances, you can reach me @financeport.