Owning a car is a necessity in most parts of the country. A few cities have reliable public transportation, but for the most part, if you don’t live and work in the middle of a city or if your business is more than a mile or two from your home, you will need to purchase a vehicle. If you have a family, the need for a car increases exponentially. Costs of purchasing, leasing or even trading in a vehicle can be daunting. However, there are multiple financial options available for those who are ready to be car owners.
Probably the most traditional method of auto financing is taking out a loan from your bank. Credit unions tend to have the best rates, but if you are not affiliated with one of these member-owned financial cooperatives, many federal- or state-funded banks can offer competitive interest rates. Generally speaking, banks offer lower interest rates than third-party loaning agencies. However, some banks only lend to those who have excellent credit. If your credit score is in the lower end of the spectrum, you may need to investigate your options with a loan agency.
Loan agencies are often third-party businesses that frequently lend to people who may not have excellent credit. To ensure they make their money back, they usually charge their clients higher interest rates than traditional banks. If your credit history is sub-par but you currently have steady income, this is still a perfectly viable option. If you are able to pay more than the minimum monthly payment, then you will be able to pay your debt at a quicker rate and dodge the higher interest rate.
Most dealerships offer on-the-spot financing for those in the market for a new car. Whether you choose this method, a bank or a loan agency, there is usually an auto financing option available to you. Leave a comment