When it comes to car finance options, there are many choices available to you and important decisions to make. It is very important to realize that when you are buying a car, it is not an asset that will appreciate in value, it is a liability that will decrease in value. So bearing that in mind, it is even more important to try and get the best deal possible if you are looking to finance a purchase of a car.
Where to go to get the finance
When you are considering car finance options you must have as many finance options open to you as possible, so it's very important to do your homework. Approach a good variety of financial institutions including banks, building societies, credit unions as well as specialist lenders to see what range of options are available. You'll then be able to narrow down your options in regards to where to go for your car finance. Remember also that you are their customer, and you should be treated that way, with the proper respect that you deserve.
Product perks and pitfalls
These days it has become increasingly popular for people to look at diverse car finance options which may go beyond the traditional car loan. Salary sacrifice schemes and hire purchase agreements exist that may suit your own particular individual circumstances better than others. For example you may benefit from the income tax benefits that you'll enjoy with some salary sacrifice regimes. On the other hand you may find the reduction in your fortnightly salary prohibitive â€“ but others may enjoy the fact that all your vehicular expenses are taken car of by this one payment. Again, it's up to you â€“ crunch the numbers, seek advice, and then make your decision.
Repayments â€“ you can't escape!
Well you can actually, just don't enter into a finance agreement to start with and you won't have to make the repayments. But that's not an option for a lot of people, so let's see how the pain of making the repayments can be minimized. It's great to get a loan with a longer repayment period, as the repayment amounts are lower, but this also means you'll be paying more in interest over the life of the loan. The reverse is true for shorter term loans â€“ less interest, higher repayments.
At the end of the day, if you can avoid getting finance for something that depreciates in value you should avoid it. However as it's not always possible to do that, it's best to be aware of all the car finance options available to you so you can make the best decision for you that suits your individual needs. My last piece of advice to youâ€¦ if you are looking at a loan agreement, make sure that you are able to make extra repayments without penalty. Be careful, and enjoy!