Thursday, November 10, 2016, PM | Leave Comment
Planning to purchase that awesome car you had dreamed for so long? Just imagine how it feels to have the keys handed over to you from the vendor. The first drive is the most thrilling one.
Wait, have you planned the finances properly? Have you sorted out what loan schemes to look forward to? Oh, if you are super-rich and plan to pick the vehicle while paying cash without causing any concern to your financial status, all these things may not cater to you.
But what if you don’t have such tremendous financial stability? A loan is what you need to get sanctioned.
Here are 3 essential tips to provide you with the necessary guidance:
It may not be wise enough to opt for pre-approved dealer loans
Many dealers offer pre-approved loans with minimal or practically no paper hassle. However; such loans do not come with the lowest interest rates. These are all business tactics implemented by the dealers and the financial institute associated with them.
There may be some catchy discounts on car accessories from the dealer’s end that may attract you in the beginning, but prove to be a bad decision in the long-term.
Be careful with the scenario as you may end up paying a bigger amount as repayment value than you actually have paid, if considered finance options from outside sources.
Therefore, try to avoid dealer pre-approved loan schemes and look for better options from varied financial institutes while comparing the interest rates.
Choose the model of the car intelligently
The model of a car plays a crucial role in finalizing the loan interest rate. Yes, don’t get surprised, but the fact is that the interest rates from the same financial institute differ largely for new car loan schemes, in terms of car models.
Also, the segment of a vehicle, as well as the loan tenure definitely, plays a crucial role in deciding the interest rate for the automobile loan.
A common rule is that the interest rates for outdated models or less popular ones are mostly higher than the car models that are presently ruling the market or are of premium category.
Keep in mind that applying for car loans to purchase second-hand models will levy greater interest rates when compared to first-hand model.
Use your credit score to bargain
Bargaining can help, if you have a good credit score to display. Before placing a loan application, you must consider pulling out your credit score to bargain for the best interest rates.
It is possible and is a totally legitimate process. But, the strange part is that many of the people are not aware of this tactics.
If you have a high or a good credit score, you have a strong chance of receiving minor relaxation in terms of interest rates and norms.
However, you need to ask the bank, or else, they may never offer you the options willingly.
It may not look such a critical scenario in the present day era, but unless you are careful, you may end up losing more money than you actually want to invest.
When looking for financial loan schemes associated with vehicle purchase, you must consider the interest rates associated with the schemes. Always look for schemes that offer the lowest rate on interest during repayment terms.
You must compare different options before applying for a loan. Be very careful with the guidelines and the company norms. Remember, a little bit of careless approach may result in getting you bankrupted.
Walter Moore is a car loan expert and a finance manager for a leading automobile company. He has served as a consultant for https://magma.co.in/ while writing columns on similar issues in different blogs and social sites.