With bank rates relatively low across all the major established economies in the world, buying a good car is easier than ever. Car loans are cheaper than they used to be pre-crisis and although the lenders are exerting caution when dealing with loan applications, even people with bad credit profiles seem to be able to afford more car for their budget.
When looking for low-cost car loans, you may be unsure where is the best place to find a deal that can both meet your needs and offer you the best APR and repayment rates. There are a number of different sources that you can look into in order to find car loan deals such as banks, car dealerships, car finance brokers, and online loan providers. Each of these has a positive and negative side, and you may need to consider which is the best for you before you ask any questions about getting the loan.
Sourcing Financing deals from the Bank
Getting a car loan from your bank is probably one of the most common ways in which car purchases are financed. Banks traditionally offer personal loans so that cars can be purchased, and these have a fairly reasonable APR, and a lack of complicated finances. Bank loans are mostly secure, and you will not have to suddenly pay back the entire sum, unless problems arise with your credit. However, recently banks have become more reluctant to lend to people, and you would need to have a very good credit rating in order to obtain reasonable car finances from this source. In fact, you may find that you struggle to get a loan from the bank under any conditions. This is where other sources of finance should be looked at.
Getting Car Finance from the Car Dealership
Another common source of car loans is through the car dealership itself. Dealers are often associated with a particular loan company, and they can help hunting for the best deal. This can help you to get a car loan which is specially focussed upon your car’s needs, including getting finance for insurance and warranty. However, these types of borrowing products often have a very high APR, and high rates of repayment which, being tied in with your vehicle, can sometimes cause you problems.
Getting Car Finance Through a Broker
You do not actually get your finance from a broker, instead you are offered a contract with a loan company through the broker. Using a middleman like this can sometimes be rewarding, as brokers can help you get a better deal on your car finance loan compared to what would be offered by either banks or the dealerships. In many cases the broker takes his cut from the lender and not from the car buyer, so you don’t pay anything on top.
Finding the Offers Online
Online car finance lenders can seem like the most attractive offer. They are able to supply you with low-cost deals, which you can then use to purchase the car and obtain the necessary insurance. There are so many of these companies operating through the internet that it is likely you will find some company to take you on, no matter how bad your credit, or how much money you need. On the downside, some online lenders are not legal, and may be trying to con you, or the company may go bust, and your debt be sold on to collectors. That’s why it is important to choose a reliable company to deal with.
