Cars are one of the most expensive purchases a person will make in their life, and as price tags continue to go up, paying for both new and used cars is becoming more of a challenge for many people. While some are able to pay for their new vehicle in a single cash payment, most of us don’t have this luxury. Instead, we either have to take out a loan from a local bank or finance the car through the dealership. Both car finance options have their ups and downs, and ultimately it is up to the person making the purchase to decide which is best for their particular situation. Below is a brief description of each of these car finance options to help car shoppers determine which is best for them.
Direct Loan
With a direct loan car shoppers get the money they need to pay for their new vehicle directly from some type of financial institution, like a bank or credit union. Once the loan is secured, the car shopper is able to sign a deal with the dealership and pay for their car with one payment. After that, they will have to make monthly payments to the lender until they have paid off the total amount of their loan. Since a loan is typically secured before purchasing a vehicle, car shoppers know exactly how much money they have available to pay for a car, helping them choose the right vehicle for their budget.
Finance Through the Dealership
The other payment option when buying a car is to get financing through the dealership. This means that once a car shopper has selected the car they want, they figure out vehicle financing rates and the duration of the payments with the dealership. While they will probably have to put some money down initially, dealership financing allows people to drive away with the best new cars without have to wait for a loan to be approved.
Both direct loans and new car financing deals from a dealership are good car finance options. While direct loans may give car shoppers greater choice, financing through new car dealers is often more convenient. In the end, each person needs to look at their personal financial situation and decide which option they are most comfortable with. Read this website for more information.