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Evaluating Best in Financing Options

You’ve made the decision to buy a car, and now you have to look at financing options to determine which will be the best choice for you. There are two ways you can finance the purchase of your new vehicle. These options are direct lending and dealer financing. Understanding each type of financing before you make a purchase will help you get the very best deal available. Whichever choice you make, be wise and shop around for the best deal first. Comparison-shopping will assist you in choosing the option that will get you the best terms for your needs.

Direct Lending

According to the Federal Trade Commission, the direct lending option involves you obtaining a loan from a finance company, your bank, or credit union. The vehicle you purchase will be the collateral for your loan. Your agreement will be for a monthly payment that includes interest on the loan. The amount of your payment will be determined by how much money you can down on the purchase, the balance, and interest charges. Once you have the arrangements made, you use the loan to pay for the car. You know much you can afford to spend, and you also have the advantage of being able to shop around because your financing is already secured. You can buy from any dealer.  Having the car loan in hand can offer some negotiating power when you find the car you want to buy. The dealership knows you have the money to purchase a car and may be willing to dicker on some things to have you buy a vehicle from them.

 Dealer Financing

According to Ghent Chevrolet Cadillac, buying and financing the car with the dealer can be an excellent option. In Greeley, CO affordable auto financing is available for qualified buyers. After a trade-in or down payment, the balance due, interest, and a finance charge are divided into equal monthly payments that you will make until the car is paid for. Occasionally the dealer retains the loan contract, but it is most commonly sold (assigned) to a bank, finance company, or credit union. The “assignee” then becomes the collecting agent for your account, and all payments are made to the new loan owner. Dealer financing can be convenient because the entire transaction is made at one location, and they have evening and weekend hours that work around most buyer’s schedules. Dealerships occasionally have manufacturer-sponsored incentive programs that can save you money, but they require excellent credit, have some conditions attached, and be limited to certain vehicles.

Decide which option is the best for you, and then shop around for a great deal on your new car.

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