With financial crisis refusing to go away, fewer and fewer people can afford to buy a car without some sort of financial aid and planning. Though cars have generally become more affordable over time, especially since manufacturers looked to reduce operational costs through outsourcing and production optimization, cars still remain a commodity which for many is out of the reach.
In an attempt to bolster sales, most car manufacturers offer the option of a loan agreement as a method of payment. New buyers drive home with their new car, and they pay a monthly premium, often with hefty interest added on top, however. Nonetheless, car loans and finance is the method that accounts for the large majority of sales.
There are two main routes to obtaining car finance; via the manufacturer or via an independent third party.
Car finance is now a key feature and something of an added value, and it is advertised on most car manufacturers’ websites. It is a commonplace that a person obtaining a car via car finance schemes does not actually obtain the ownership of the car until it has been entirely paid for. However, to maintain a competitive edge, some manufacturers, Ford for example, offer ownership of the car from the day one, regardless of the payment methods. Procedurally, although things have become more simple online application forms, the process still includes the bulk of the procedures that need to be followed.
Want to know how much it will cost before getting the ball rolling? Most manufacturer websites these days offer a finance calculator, quickly enabling potential buyers to work out their monthly repayments in line with what they can afford. Although, manufacturers do offer a comprehensive list of car finance options, it is the third party independent loan providers that often come out with somewhat cheaper deals.
For instance, in the US, banks offers a range of car finance products including both new and used car loans as well vehicle refinancing. If you feel like you’re paying too much each month, the vehicle refinancing tool is an easy and quick online method to see if you could transfer the loan to a bank and gain a better rate.
Companies like Capital One and Ally Financial offer car financing services and in the US and a host of other countries, the comparison of car finance has become a huge business. Buyers seeking the best deals have spawned the emergence of cost comparison sites enabling them to find the best deal on the market quickly and with ease.
For instance, leasecompare.com has been specifically designed for the car finance market, and along with other comparison sites, it is often a regular stop for buyers looking to purchase their new car with some financial arrangements and assistance.
So, the next time you start planning to buy your newcar, familycar, motorcycle, van, or any sort of vehicle, make sure you have explored all financial options available before you seal the deal.
Image courtesy: FreeDigitalPhotos.net
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Great article. I didn’t even know that auto manufacturers themselves offered auto financing, I thought this was something that you always had to do through a third party. However, it seems like the third party option will still be the cheapest option available.