What are the Loan Options for Purchasing a New Automobile?

Once you choose the car you want to buy, you have to look at the various loans options that will enable you to pay for this car. You should do your research so that you are knowledgeable about all your options so that you get the best deal. This bit of work beforehand will put you in a stronger position when you do sit down with the salesman to finalize the deal. It is too late to make a deal and then find that you don’t have the credit rating or the income necessary for lenders to approve your automobile loan. Consumers often make the mistake of choosing the car without finding out if they qualify to borrow that amount of money.

Some of the automobile manufacturers and dealer companies do have incentives for customers in the form of 0% auto loans. This incentive often applies to only certain autos that the dealers want to move off their lots and for a specified period of time. If you are looking at buying an expensive car, it is unlikely you will be able to avail of such a deal because the payments over the allowable term are very high and out of reach of most ordinary wage earners

Once you find a car you want to buy, you should ask the dealer for a print out of what it will cost on the road. This price will include the costs of licensing the vehicle, the applicable taxes and charges for freight and delivery. Then you can contact the loans officer at your bank to see if you can qualify to borrow this amount of money. It is important not to apply for the auto loan until you are certain you meet the requirements because if you are turned down, this will affect your credit rating and thus, your future borrowing power

Many car dealers also offer loans. There are certain months of the year in which dealers sell fewer automobiles and therefore offer incentives to buyers. This usually occurs in January when consumers are trying to pay off the debts accumulated from Christmas shopping and when the new line of automobiles comes on the market in the fall. You can save money by buying a car from the previous year and it will still be a new car. Some of the incentives dealers often offer include 0% auto loan, an amount of money off your auto loans charges, a lower rate of interest and even a autod that will give you free petrol up to a specified amount

Leasing is another option you can look at for financing your new auto. You basically pay a monthly rent on the car for a specified period of time and by making payments for the length of the term, you pay off the automobile in full.  You do enjoy full warranty on the automobile during this time and perhaps afterwards depending on the length of the term

Leasing a automobile is another option you can explore. This is the same as hiring the automobile for a specified period of time, such as three or four years. You have a lower monthly payment because you are not actually paying out the full price of the automobile. You get the same warranty as you would if you bought the car and you can bring the automobile back at the end of the lease period and take out another one. These schemes are generally not available if you have a poor credit history, instead you could apply for any of the bad credit auto loans available from many companies