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Car Loans vs. Dealership Finance ? making the right choice for your pocket

If you?re looking to buy a car ? either a new model or a second-hand one ? then the chances are that you?ll be looking for some kind of finance to make your purchase. There are two main ways that we buy cars nowadays ? some of us choose car loans to raise the cash and some of us will use dealership finance when they buy their car from a dealer. If you do intend to use a dealer for your next car purchase then you should think long and hard about your options before you actually hit the forecourt as a bit of forward planning can save you a bundle of cash.

The truth is that a lot of us opt to use dealership finance rather than car loans simply because it is so convenient to arrange. You are on the spot, you?ve seen the car you want to buy and you know that it can be yours straightaway if you take out a finance agreement with the car dealer while you are there. This may well be an easy and quick option but it may not actually be the best option for your pocket. You could, in fact, get a far better deal with some alternative form of car loans finance from a different lender.

If you compare the standard rates of interest for either standard personal loans or for specialised car loans with the cost of dealership finance then you?ll soon realise that you?ll be paying through the nose to borrow money through a dealer in the majority of cases. Dealership finance is quite simply usually much more expensive than the average loans product available on the market for most of us so ? easy as it may be ? it won?t necessarily be cheap and you really can find yourself paying over the odds for convenience and speed when you don?t need to.

All you really need to do before you buy a car is a little research. If you check out your options for car loans before you choose a car then you could just as well walk into the forecourt with the money you need already in your pocket so you needn?t lose out on the car you want. Or, if you want to check out cars first then you won?t necessarily lose any time now either. Car loans are incredibly quick and easy to arrange nowadays ? especially if you go online to shop where you can get a decision on your application virtually instantly. And, the fact that the rates of interest you?ll be paying will be so much lower will mean that you?ll have more money to play with. So, you could simply save yourself some cash or even splash out on a more expensive model as your car loans option will be that much more economical on your pocket as a whole.

Micheal Reese has been in the <a href="http://www.unsecured-car-loans.co.uk" title="Car Loans">car loans</a> and <a href="http://www.loans-uk.gb.net/cheap-car-loans-uk.html" title="Cheap Car Loans">cheap car loans</a> industry for 10 yrs.

"As Is" Rarely a Good Sign When Purchasing an Automobile
As a car dealer that specializes in luxury late model imports, I never deal with cars that don’t have a balance of factory warranty. Still, I know a number of people out there simply can’t afford to spend a lot on transportation. I’ve been there, and I know how it feels to be on a budget when needing a reliable vehicle you can depend on to get you to and from work. The solution for many is to purchase older model used cars with high mileage. In my opinion, this can be an excellent temporary (or permanent) solution to your transportation needs. Properly taken care of, a vehicle can last for several years beyond what many would call its “shelf life”. The trick, of course, is knowing which automobiles have been well maintained. As with people, the phrase “you can’t judge a book by its cover” often applies. A rusty exterior, while not esthetically pleasing, may be the outer shell to a well oiled machine (pun intended). As I mentioned in another article, having your mechanic check out any vehicle you are considering isn’t a bad idea at all. It may cost you forty or fifty dollars, but the amount it could save you in the short term is well worth it.
There is one type of car, however, that I can wholeheartedly recommend against, and that is a vehicle sold “as is”. “As is” vehicles have no warranty whatsoever. The buyer assumes all responsibility for the auto in the condition its in when sold. Let me make it clear for you…if a vehicle is sold “as is”, there’s always a reason why. A reputable dealer will be up front with you about problems with an “as is” vehicle. You may be wondering why any reputable dealer would be selling a car “as is”. The answer is that dealers often receive cars on trade that have one or a multitude of mechanical problems which are not worth the trouble (i.e. expense) of fixing. Still, these cars can serve some purpose. They can be used for parts or, in the right hands, repaired and driven as reliable transportation. Consumers looking for a car they can simply drive right off the lot, however, would be doing themselves a favor by staying away from any auto that doesn’t have at least a thirty day warranty. If something is seriously wrong with the vehicle, there’s a great chance it will show itself within that time frame.

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Car Loans After Bankruptcy - Financing Auto Loans With High Risk Lenders
Bouncing back after bankruptcy is easier than most people think. The key to rebuilding credit involves re-establishing a good payment history with new creditors. To do this, you must apply for new accounts. Getting approved for new lines of credit following a bankruptcy is challenging. Fortunately, many lenders offer programs that allow a fresh beginning after bankruptcy. If you are hoping to boost your credit rating, consider getting approved for an auto loan.

Benefits of Getting an Auto Loan after Bankruptcy

If you do not begin establishing a good credit history after bankruptcy, your credit score will not improve. If filing bankruptcy, it is wise to educate yourself on ways to quickly boost credit rating. One such tactic includes financing an automobile.

Most auto loan lenders offer loans to people with bad credit. Cars and other types of vehicles are collateral-based loans. Hence, if you do not repay the money, the lender may reclaim their property.

Disadvantage of Getting an Auto Loan after Bankruptcy

Auto loans after bankruptcy are very popular because it?s one of the easiest methods for quickly re-establishing credit. The downside is that these loans carry a very high interest rate.

Interest rates depend largely on credit scores. Having bad credit may qualify you for an interest rate around 9 or 10 percent. However, if you have very bad credit, the interest rate may climb to around 18 percent. Nonetheless, it is possible to refinance for a better rate once your credit improves.

Using High Risk Auto Lenders

If getting a new car after bankruptcy, accepting dealership financing without shopping around is a big no-no. Dealerships want to make a profit. With this said, many dealerships charge higher interest and finance fees. Before signing a loan agreement, shop around and explore other lending options.

High risk or sub prime auto lenders offer a wide selection of loans. These loans cater to all credit types. Furthermore, the rates are extremely reasonable. To obtain quotes from sub prime lenders, complete an online application with an auto loan broker. Most brokers offer instant quotes and multiple offers from many lenders.

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The Three Biggest Questions When Buying a Car
The biggest question in the car buying process is whether to buy new or used.
The second biggest question is what make and model to purchase.
The third most important question is where to get your financing.

#1 New or Used
The average new car costs more than double what the average used car does. (The Kelley Blue Book pegs the average new car price in 2005 at $26,100 and the average used car price at $13,000). It s not surprising, then, that used cars outsell new cars three-to-one.

New car loan rates are about the same as used car loan rates. The major difference between the two is the length of the loan. Most used car loans are for no more than 36 months whereas new car loans can be 60 or even 72 months long.

Remember to take depreciation into account. Depreciation is the difference between the Manufacturer s Suggested Retail Price when you bought the vehicle and what it s worth now. Some new cars lose as much as one-third of their value within a year. On most vehicles, depreciation settles down to about seven-to-ten percent per year after the first three years.

Which brings us to . . .

#2 Make and Model
One way to slow depreciation is to buy a make and model with a prestigious nameplate. Models that depreciate faster than most include: Jeep Grand Cherokee, Ford Explorer, Ford Taurus and Lincoln Continental. Cars that hold their resale value longer include the more expensive makes like Lexus, Mercedes-Benz and BMW.

To learn more about which makes and models offer the best value in today s market, you can research several auto review sites online. You can also use the Internet to check everything from the performance ratings to the safety records of the vehicles you re interested in.

Be sure to test drive any vehicle you are considering under varied road conditions. If the vehicle is used, ask to see all maintenance records and check its history on CarFax. And don t forget to have your mechanic give it a thorough inspection. If you are buying new, try to pay as close to the factory invoice price as possible. You can look up factory invoice pricing online.

#3 Car Financing
Many experts recommend getting your financing before you start car shopping. This puts you in a better bargaining position because the dealer knows money won t be an issue. (They also won t have the chance to run you through their finance department, which is a good thing for you!)

Of the 60 million new and used cars sold annually in the U.S., about 27.5 million are financed by subprime loans to buyers with less than perfect credit. If you have bad credit “a FICO score of 620 or lower “you will need one of these loans.

You will not qualify for the new car offers advertised on TV, like the 0 Down, O Interest or Low APR deals. However, you can still get a good deal on a bad credit car loan from Internet lenders like Auto Loans In Seconds. Their free online application process lets you know exactly how much you can borrow, and at what rate.

Consumers should shop around for financing with the same vigor that they shop around for a car, says Jack Gillis, public affairs director for the Consumer Federation of America. One or two percent can erode all the money you negotiate in a good price.

Mike Hamel is the author of several business books. His auto financing articles have appeared on sites like <a href="https://www.autoloansinseconds.com">Auto Loans In Seconds</a>.

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