Options For Financing Your New Car

Buying a vehicle can be expensive, and in many cases, the best way to handle the cost is to finance the purchase of your car through an auto loan service. There are several options you may want to consider so you can decide what is right for you. 

Bank Loans

You can apply for a loan from your local bank to purchase a car, and they may have several programs that will fit your needs. For a new car, a lower interest loan that spans over five or six years is not uncommon. For used cars, a loan that is two to three years is possible. In either case, the value of the car needs to be high enough for the loan to even be considered so expect to have to provide some details to the bank before they consider giving you the loan you are looking for. 

The loan is more than likely going to need securing, and the car is typically the best collateral. If the car's value is too low, the bank may require you to place a down payment with them before funding the loan.

Credit Union Loans

A loan from a credit union is going to be similar to that of a loan from the bank, but often the percentage of interest is lower because you are a member of the credit union. They may also require a down payment before funding the loan, but oftentimes, if you are a member of the credit union, it is easier to get a loan through them than a traditional bank,

The vehicle still needs enough value for the credit union to issue the loan, but talk to the loan officer about what you want to buy and all the variables that affect the value of the car or truck.

Dealer or Factory Financing

If you are buying a new car, you may be able to get your financing through the dealer and get a better interest rate. The finance officer may offer you several options to finance the loan, including leasing or financing through a lending company that is willing to work with people with a few faults on their credit history.

Even if you are considering financing your new vehicle through your bank, take the time to talk to the salesman and the finance officer about the options they have for you before you decide who you will use. Lower down payments, better interest rates, and shorter terms can all be achieved if you shop around and find the right place to get a loan before you buy your next car.