Car Financing

There are so many car financing options ranging from simply paying cash to leasing, from car purchase loan to guaranteed car finance. Which option for car financing suits you best can be found out by comparing your present financial position with the available options for car financing in your area.

Car Finance Loan

Conventional car purchase loans are usually for terms of 36 months to 60 months. Car financing using a conventional car loan option usually require a down payment but depending on the strength of the buyers credit score zero down car financing may be available.

Depending on dealer inventory and time of month there may be available incentives like zero percent interest for 36 months or even cash back offers, which make car financing an even easier matter.

Co Signer for Car Finance

A person with bad credit wishing to buy a car and not be penalized with high interest rates resulting in inflated monthly car loan repayments and the need to make a large down payment might consider using a friend or family member with a good credit score as a co signer to assist in their car financing.

Using a co signer usually enables a person with bad credit to get car financing at desirable interest rates and low down payment requirements.

However it is necessary for the person with bad credit using a co signer to remember that if the payment schedule is not met that the co signer’s credit score will be hurt.

Leasing

Car leasing is an option where you agree to pay a certain amount each month for the use of a car. Most leases are for new cars and the term of the lease can be anything up to 3 years. The average lease will be for 21 to 36 months. The beauty of a car lease is that the car buyer only pays for the time for which they have the use of the car and when the lease term is over the car is simply give the car back to the car leasing company.

Because you are only paying for the time for which you have the use of the car the monthly lease payments tend to be roughly half of the cost of buying a similar car under a conventional car loan.

Secured Car Loan

A secured car loan is where you give the lender collateral equal to or greater than the value of the car you are buying. This makes your loan less risky thereby securing a good interest rate and longer loan term drastically reducing your monthly car loan repayment for your car financing deal.

Guaranteed Car Finance

Guaranteed car finance is a car purchase option where the car is owned by the lender until the loan is paid off in full. After the loan has been paid in full the ownership is transferred to the buyer and he/she will own the vehicle free and clear. Guaranteed car financing is similar to a lease purchase or rent to own contract.