Buying a car is not as easy as it sounds. There are a lot of things that you need to consider before you decide on purchasing one, as this decision will make a big difference to your finances in the future.
Planning to buy a car is not just about selecting the color or the make and model, but the financing as well. Ideally, it is better to pay for a car in cash. However, the reality is, whether it is a new car or used car purchase, they use a loan to finance the payment of the vehicle.
The Different Types of Car Loan Options
When choosing to buy a car, one of the things you question first is whether to buy a new or used vehicle. The next concern is your finances. If you opt for car loans, can you afford the interest rates?
There are two types of car loan options that you can consider when purchasing a car. These new car vs. used car loan options will help you decide which one suits you best.
- New Car Loans
Many people prefer to buy a new car than a used one. A new vehicle comes with a warranty, and you will not have to focus on continuous repairs for the next few years; the only thing you need to focus on is its maintenance.
Many financing industries prefer to approve new car loans because the risk is lower. Although the cost is higher, the car manufacturer provides a warranty to new car purchases. Interest rate ranges from 8% onwards and typically lasts 5 to 7 years of tenure.
For new car loans, the interest rate is lower, as some banks and lending companies provide “on-road” costs to reduce the borrower’s financial burden. However, attached to the purchase of a new car is an insurance premium—that means your annual cash outflow increases.
- Used Car Loans
If you intend to fund the purchase of a used vehicle, applying for a pre-approved auto loan is ideal. Most car buyers pay for their cars by taking out a loan. For individuals that cannot afford to purchase a new automobile, this option is ideal.
Although the upfront price of a used car is lower than a new car, used vehicles are more expensive in the long run. Not only will you worry about its regular maintenance, but you need to ensure that you have the budget to pay for potential repairs. That’s why it is crucial to shop at used car dealers well-known for selling quality used cars.
Choosing the Best Car Loan Option for You With Vantage Finance
If you are looking for a financing company that can provide the best car loan options, Vantage Finance is the right fit for you. Our products and services are well-crafted, allowing us to work closely with our dealer clients.
By partnering with us, you can maximize your dealership with our expert F&I services.
To learn more about our services, contact us for more details.
