Auto Loans – What are my Options?

If you find the perfect car for you, a car that fits your image, and your activities, but does it fit your budget plan?  If you're like 75% of people in the UK, you will need some sort of auto loan to finance your purchase.

Auto Financing is a huge industry, generating billions of dollars a year in loans.  Many banks and lender's are looking to get in on the market, and thus the lending market is rich with opportunities to find good loans at competitive prices.  Competition among lenders means you come out ahead on interest rates and terms of your loan.  Before you go to buy, check some Car Loan lenders online to make sure you end up with the best loan for you.

The Dealership Car Loan

Most people when buying a new car, get financing at the dealership that they purchase their vehicle from.  Many people don't even realize that they don't have to use the dealership for the loan on the car.  And while using the dealership for your loan may be the most convenient source of financing, the convenience comes with a price.  Interest rates on car loans financed by the dealership are usually much higher than a similar loan from a bank, credit union, or car loan lender, sometimes by a substantial amount.  Dealerships take advantage of the convenience of getting your car loan through them in order to make a cut on your loan as well as the car you just purchased.  A dealership will usually set interest rates based on credit rating, and then add extra fee's on top.  Many times they will even sell your loan to another lender, giving them incentive to give you the highest interest rate possible when you finance your new car.

Get pre-approved

It is a good idea to shop around at some lenders before you go to pick out a car.  You should already have some idea of how much you want to spend on your car, and how much you will need to meet that goal.  With this in mind you can try to pre-approve for some loans with online lenders, or banking institutions in your area.  This way you can go to the dealership prepared with your own pre-approved loan to buy a car without having to rely on the dealership's more expensive loans.  And if you do decide that you want to use the dealership for your loan, you can at least use your pre-approved loan figures as a bargaining piece to get a lower interest rate or better terms that you could potentially get elsewhere.

Other options

If you own your home, you can sometimes get the lowest interest rates by taking out a home equity loan.  With this type of loan you borrow against the paid equity already on your home.  The interest rate is usually much lower than other types of loans, because the loan is secured by the equity on the house.  Many times interest on home equity loans can get you deductions on your income taxes as well.  And even if you are eligible for a home equity loan, you may want to compare it to all your other loan options to make sure you get the best APR.

No matter the direction you choose to go with your car loan, let the experts at https://installmentloanscompany.com help you get the best possible loan for your new car purchase.