Have you been thinking it’s time you owned your first car? Or perhaps your current vehicle is starting to look old-fashioned, and you want to style up with a new ride? Well, whichever the case, we can all agree that cars don’t come cheap!
Nonetheless, you do not always have to save up in order to have enough to drive away with your long-coveted ride from the famous car yard in town. You can always turn to Brisbane car financing, which lets you own the car and pay the borrowed money in affordable instalments.
However, as exciting as it might feel to own a new car, one thing holds true. A car is a depreciating asset that also comes with added expenses. This is all the more reason to borrow what you can comfortably afford to pay back without ruining your credit.
With this in mind, let’s look at a few ways to finance your car purchase wisely.
1. Buying in Cash
Purchasing a vehicle isn’t everyone’s cup of tea. After buying one, you will need to maintain it at a cost, fuel it, and pay auto insurance, among other things. This being said, one of the cheapest ways to get a new (or used) ride is to pay for the purchase in cash.
If you have some good savings in your bank account, buy the car in cash. Once you have the money saved, there is no better feeling than being able to look for a new ram 2500 for sale near ABQ, or something similar, and buying the new vehicle outright. You not only get to own the car outright, but you can also sell it anytime you want. Another advantage is that nobody will give you sleepless nights asking for their monthly repayments.
2. Compare Auto Loans
An auto loan is doubtlessly one of the fastest (and sometimes cheapest) options for financing a car. If your purse is a bit deficient, all you will need is to look for a lender with guaranteed car loans no matter what the car you want is worth.
Compare offers from different auto loan lenders or checking your new car pricing online to see if your potential car is worth the money. As well as this you should be checking features like loan terms, interest rates, loan fees, and repayment structures. This way, you can easily get a car finance option that best suits you without compromising your financial wellness.
3. Use Credit Score
Having a good credit score can work to your advantage when it comes to financing your car. For instance, having a good credit score could attract lower interest rates or higher loan amounts. In some cases, the dealer may act as a negotiator and link you to the best lender to approach. Lenders love borrowers with a credit history and great credit scores because it reduces their lending risks. On the other hand, a poor credit score will often attract lower loan amounts and higher interest rates.
4. Consider Making a Huge Deposit
Sometimes we need to think smart and work with our fifth sense to save a dime or two in these hard economic times. When buying a car, it’s always wise to put up a higher down payment if your wallet allows it. Depositing a small amount means you will take longer to repay the loan. At the very least, consider raising 20% of the car’s buying price.
5. Keep the Loan Term Short
It is also wiser to keep your auto loan repayment period as short as possible. Here, one rule of thumb holds. The higher the amount you pay for your loan monthly, the shorter the period of repayment.
Higher installments may also lower your interest depending on the type of car loan you get. There is absolutely no sense in paying high interest for an asset that will be decreasing in value each mile it covers.
Conclusion
A car, aside from real property, is probably one of the most expensive things you can buy in a lifetime. This means that you shouldn’t afford to gamble with the financing process unless you’re not afraid of going broke.
Make sure to spend some time shopping around, compare the different financing options available, and consider a flexible loan term. Always pick the financing option that suits your pocket best.
