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The Advantages and Disadvantages of Car Financing

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Are you stuck and can’t decide whether you should finance your next car purchase? Needless to say if you can afford a straight full payment for a new or used vehicle then why not. However this is not true for most people and in fact more people choose to apply for a loan simply because they don’t have the cash or maybe they have other important financial obligations that also needs to be paid.

Moreover, people don’t know about the fact that there are a lot of options for them when it comes to car financing. Even consumers with poor credit or those with credit issues (i.e. bankruptcy) can still avail of an auto loan.

In order to help you decide, we are going to discuss the pros and cons of auto financing.

Disadvantage.

  • Monthly Payments with Interest

Obviously in car financing, whether a new or used car, there will be monthly payments and interest payments. To add, cars are expensive therefore one should be prepared of such financial obligations. The main downside to auto financing is the monthly payment obligations that come with added interest.

Every situation is unique and depending on your financial state, the interest may be high or low. Lenders add interest because of the risk that they are taking with you as a borrower. Whether they see you as a high risk or moderate-risk debtor will largely depend on your credit rating.

Advantages.

  • Go home with your Own Car

This is what car financing is all about – to provide you with a car that you need. Of course saving up money and then purchase a car would still yield the same result but the downside is saving up money could take years until you can afford to buy a car. Additionally, you might end up just settling with a car that you can afford but don’t really like. With car financing, it is more likely that you will achieve the car that you have yearned for.

  •  Build and Fix your Credit

If you have a poor credit or no credit at all, applying for a car loan is the best and easiest way to establish good credit. How? By making on-time monthly payments and successfully settling your loan, you can significantly improve your credit rating. By doing this, you will have a strong chance of securing another approval when you decide to buy another vehicle. To add, because of your good credit it is likely that you will not only get instant approval, you might also enjoy low interest rate offers on your next loan.

  •  Having the Car that You Want

With car financing, you don’t have to wait and save the amount of money required for your target car. More importantly, auto loans offer a lot of financing options for you to choose from. It is worth noting that if you decide to apply for a car loan, you have a wider array of vehicles to choose from and most of all, you get to go home with the car that you really love. To sum it up, the pros clearly outweigh the cons.

Tips for Researching A Vehicle

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Doing a considerable amount of research before making a purchase is always wise. But the question is are you doing it the right way? Are you looking for the right stuff online and is your source credible? While searching online makes it easier, personally checking a car and doing it the old-fashioned way is still the surest way to do research. Looking for a vehicle is a process and can take a little bit of time.

Below are a few tips to consider before making a purchase.

You Already Know More than You Realize

Casual browsing the internet or even reading some free brochures about a car’s engine, safety features and other specs is already considered doing research. You just don’t realize it. When taking a ride with your family or friends and making an opinion about the car’s power, speed and comfort is another sign that you are knowledgeable enough. All you need to do is use these information and apply them when you are looking for the right car.

Online Research might Not be Enough

Doing your research online is easier and it is very likely that you will find a more comprehensive review about a certain vehicle. Information such as size of the engine, fuel efficiency, maintenance costs and other vital specs are readily available online.

However, you also need to make sure that your looking at credible sources. The safest way to do this is to go directly to an automobile manufacturer’s site and acquire necessary information about the car you are gunning for.

After spending a great deal of time surfing the web, doing an actual  test drive is still the most reliable way of checking a car’s performance and reliability.

Visiting your Dealer

Online search is indeed helpful but visiting a dealer directly and checking out a car up-close and personal is still the best way of doing research. The “feel” of the car is the deciding factor.  Always ask for a test drive so that you will have an idea about the smoothness of the ride, its handles and other added features that is designed to impress. Besides, this way you can actually test a variety of car prospects so you will not miss out anything.

Buying a car is a serious and personal decision. You need to be patient and meticulous in checking out a prospective car. To add, it helps to make a preliminary list of cars so that your search is narrowed down to a fewer number of vehicles. From this list, do a comparison and slowly make your way to the final car that suits your preference.

Looking for a dealer? New Car Canada is at your disposal.