Getting a Car Loan

Many people choose to get a car loan form the showroom that they buy the…

Many people choose to get a car loan form the showroom that they buy the car form. They do not consider looking elsewhere because they think that it will speed up the sale and they maybe do not realise that there are other options. It does seem very quick and convenient and keeps all of the paperwork together in one place.

However, car showroom loans tend to be very expensive and if you go to a bank to borrow the money, you are likely to be able to get a much better deal. The interest rate and the cost of a loan from a showroom could be much more than that of a bank.

So do not just go for the offer made by the showroom. Make some enquiries before you start looking for a car and then you will know what options are available for you. You may even be able to organise the loan before hand and then have the money there to buy the car. This means that the sale will not be slowed down and in fact will probably be speeded up by the fact that you already have the money available to pay for the car.

You may need to use the new car as collateral on the loan, but this still should not tie you to getting a loan with the showroom. It may slow things down slightly but if it means that you can save a lot of money in the long run then it will be worth waiting a few days longer to get the new car.

Make sure that you read all of the paperwork before signing up for the loan and check out all of the costs. A salesman is likely to not mention any fees unless you ask and they can make a significant difference to the cost of the loan.

If you intend to get a car loan hoping to pay it off early then you will need to find out if there is an extra charge for doing this. It may not even be worthwhile paying it off early because the charge is so high.

Some car loans offer an interest free period or no repayments for a time period. This can be good but it may mean that the total cost f the loan is more expensive so take that in to consideration when you are looking at this type of offer.

The best thing to do is to make yourself aware of what is available to you before looking for a new car and then you will know what will be your best option to get a good deal on your car loan.