There is nothing like surfing online guides and dreaming about what we would choose to buy if we only had the funds. However, these days, very few people walk into an auto dealership and lay down $10,000 in cash – in fact, one potential buyer in the UK who attempted to do just that on a £7,000 purchase was sent packing by the dealership and told that cash was not an accepted form of payment! Nowadays you just finance your car.
So just because you don’t have the money sitting there under your bed does not necessarily mean that a new set of wheels is beyond your reach. Here, we look at two of the most popular modern-day options for getting the drive of your dreams.
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Once the domain of the corporate and fleet world as a convenient way of providing company cars and vans to staff, private leasing is now enormously popular. There are more and more car leasing specialists out there to meet the growing demand. When you take a look at the deals available to finance your car, it is obvious to see why this is the ideal solution for so many.
As well as the manageable monthly payments, you also have the benefit of being able to include routine servicing costs and so on into the overall agreement. This means no hassle, no worry and predictable costs throughout the period of the lease. For business owners and the self-employed, there are potential tax benefits of leasing, too. Also, fleet management software have made the deal much sweeter as you can track each vehicle’s progress.
Of course, there is no such thing as a free lunch, and there are potential downsides to consider, too. One is that you will need to find a significant deposit to finance your car. The deposit is typically equivalent to around 8-10 months lease up front. You should also bear in mind that you must agree on an approximate annual mileage. If you exceed this, you could face additional costs when you return the car at the end of the lease. There are certain conditions to which can you give your car back to the finance company.
If you prefer the idea of the car being all yours, there are plenty of loan options available. Most dealerships will offer financing in-house. Listen to what they have to say, by all means, but unless they are offering the deal of a lifetime, you are almost certainly going to be better off taking out a loan from your bank or a financial institution and using this to pay the dealership in full.
These days, interest rates are low, so this is an excellent time to get credit. However, as with any such purchase, think through all the costs before you proceed to finance your car. Unlike the lease deal, you will be liable for things like servicing costs, road tax and so on. So, you need to factor these into your overall budget.
Avoid the temptation to go for an extended loan that runs for years and years. The monthly repayments might look tempting, but it will cost you more in the long run. The ideal term to look out for is something between three and five years to finance your car.
Saba Idris is currently a web content writer who has always been enthusiastic about learning new skills.
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