Financing a Car: Everything You Need To Know

Are you looking to get a new car?

With options for large families to sleek and stylish models, cars are a necessity more than a luxury these days. 

But many people don’t have enough money to buy one right away. Cars are expensive enough to look after

That’s when car finance options and car loans come into the picture.

Although some lenders claim to walk you through the process, they tend to skip crucial pieces of information. 

However, it is essential to know the different ways on how to get car finance. 

Keep reading because it will help you stay informed about all the necessary things before opting for a car finance loan.

With these helpful tips and tricks, you’ll be driving away in your dream ride in no time.

Man driving away new car after being given keys

 

Car Finance Option #1 – Car Loan

Most people buy a car after getting in touch with a reliable car loan provider. 

If you are purchasing a car for the first time, you should understand the process in detail.

Apart from first-time buyers, people who want to rebuild their bad credit also require car loans. 

They contact a car loan company, take out a bad credit car loan, and make sure they pay their fees every week. This helps to improve their credit score. 

In fact, their credit score turns from red to green in almost no time. 

There are two types of car loans that you should know about: secured and unsecured.

Secured loans allow the lender full rights over the car. Although the borrower drives it, the car technically belongs to the lender. If the borrower can’t pay anymore, the car will belong to the loan provider.

With so many car loan providers operating in Australia, finding a reliable one will not take much time.

For the roof restoration team at CM Roofing, cars are an essential to day to day life, including livelihood. “When you rely on your car for your job or to get through the everyday, it pays to do your research and find an option for car financing that works for you. That way you can ensure you’re able to keep on top of the payments without burdening yourself financially or otherwise.”

Approved car loan application form and car keys

 

Car Finance Option #2 – Dealer Finance

Dealer finance is similar to car loan providers. 

In this instance, dealers will provide finance for your car, and you need to pay them back. 

But, dealer finance options often insist that clients buy the car on the same day. 

They make promises that encourage you to sign up for a loan on the spot, with the result being you can drive home your favorite car that same night.

According to the accounting experts at Concept Bookkeeping, not all loans are made equal. “When it comes to signing loans, it’s always best to do some research beforehand. Dealer finance is usually convenient but expensive which might put you into more debt which will be a challenge to get out of.” 

Car keys being given to customer over loan forms

 

Car Finance Option #3 – Factory Finance

If you don’t like the terms and conditions of dealer finance, you can opt for factory finance instead. 

In this system, car manufacturers offer you a deal that is significantly lower than the dealers. 

However, it works like a lease. The moment the lease ends, you need to return the car to the manufacturer. These deals usually last for four years.

If you don’t have any specific car model in mind and want a low monthly payment, factory finance is the way forward.

According to the financial experts from Robinson Accounting, factory finance also has a few drawbacks. They note “first of all, the low monthly price can accumulate to cost more over time. That is why you need to consider various factors before finally choosing your favorite car or a finance policy to purchase that vehicle.”

 

Are You Ready to Pick Your Dream Car?

Now that you know a lot about different car financing options, it will help you make the best decision. 

Always remember, you need full commitment to whichever finance method you choose so that you can afford its monthly payments. 

This also helps to meet the required deadlines of the finance system you chose.
Looking for more ways to look after you car?