Overview Of Financing Options When Purchasing A New Car
If you are thinking of buying a new car and still do not know whether to finance it with the help of the dealer or directly with the bank, LR tells you the differences and benefits of buying your car through these two modalities. And even if in general terms it seems the same, in the long run, you could see the differences.
While performing the calculation initially depends on the model of the vehicle to be purchased, its cost and the initial fee with which you want to buy the car,
For this analysis a automobile was taken for around $ 60 million, an initial fee of $ 10 million and a maximum term of 60 months;
Which is one of the programs that is most taken with financial institutions.For Alfredo Barragan, a specialist in banking at the Universidad de Los Andes,
When buying a car the rate of the banks is very similar. “However, the commission for the study of credit and the benefits when buying a vehicle through a bank loan or the intermediation of the concessionaire can make a difference, since there is a cost that people do not look at much and it is the Insurance. In many cases, it can be a plus of the concessionaires “.
But what should you take into account when looking for the best credit option? For Barragan, as well as for other experts, usually, the first step is to adjust your ability to pay. Banks or cooperatives conduct a study where they take into account the applicant’s income, credit history, and job stability. In that sense, if you meet these requirements, it is time to look for the best financing modality.
In banks, banks have very similar rates. According to Banlinea, a portal that performs the comparison of rates to make the best financial decisions, the average price for new vehicle credit is 1.5% month due. Thus, for a $ 60 million vehicle, the fee to be paid would be around $ 1.2 million.
Search and compare to obtain the best possible price comparing the models and estimates published in the advertisements and dealers’ salesrooms. To compare prices, you can also contact car purchase services and car buying agents.
Prepare to negotiate the cost of the vehicle. Dealers may be willing to haggle over their profit margin, which is often between 10 and 20 percent. In general, this is the difference between the retail price suggested by the manufacturer, also known as MSRP, and the invoice price.
If the dealer does not have the car you want to buy in stock, consider ordering it. This may involve a delay in delivery, but the vehicles that the dealer has in stock may have some options that you do not want – which may increase the price. But dealers usually want to sell their inventory quickly, so if the dealer has a car that suits their needs, they may be able to negotiate a convenient price.
Financing your new car
If you decide to finance the purchase of your vehicle, know that the financing offered by the dealer may not be the most convenient, even when the dealer contacts the provider on their behalf. Establish contact directly with the loan entities. Compare the financing offered by the lenders to the funding provided by the concessionaire. As the loan offers vary, search for the best terms, compare the annual percentage rate (APR) and the duration of the loan. When you are negotiating the financing of a car, do not focus only on the amount of the monthly fee. The total amount you will end up paying will depend on the price you negotiate for the car, the APR rate and the duration of the loan.
Sometimes dealerships offer a meager rate of financing for some cars or specific models, but they may not want to negotiate the price of these vehicles. It is likely that to get special interest rates, you will be required high down payment. Under these conditions, you may find that in some cases you may find it more accessible to pay higher financial charges on a car that has a lower price or buy a car with a lower down payment.