subject: All About Car Loans Rates How To Avail It With Bad Credit [print this page] As the choices in car design, performance, and brands have increased, so have the choices in car loans. There is an array of
car loans available in the market today. Internet is also flooded with online auto loans. Explore the various car loans, and
how they differ from each other. There are a few differences between a used car financing and a new car loan.
A new car will be always purchased from an authorized dealer. Hence, the buyer may obtain financing from the dealer as
well. The paperwork becomes simpler, and one need not deal with the strain of coordinating all the parties. However, the
price of a loan from the dealer is usually higher as compared to a commercial finance. It is difficult to obtain used auto
finance as generally used car dealers are small businesses. Moreover, obtaining a loan from them can be risky as they might
go out of business, and ask the buyer to make a lump sum payment of the balance amount.
Used car loans from a finance institution can be expensive because of the lenders risk involved in investing in a used
car. The lender's concern can be that the value of the car may go lower than the value of the loan before the loan is
entirely paid back. In such a case, if the borrower defaults, the lender may have difficulty recovering the full amount of
the loan. For this reason, the lender charges a high interest rate to make the loan less perilous.
Buying a used car can be considerably less expensive than a new one, because the overall cost will be much lesser. Hence,
one need not make a huge down payment, and still avail lower monthly installments.
The buyer should also check the history of the used car. Negotiations about the finance plan in case of returning a
substandard car should be done beforehand.
One of the biggest risks about purchasing a used car loan is slipping into an upside down car loan. Within a few years
time, the value of the car may drop drastically, and then the borrower will be paying off a loan, which is more than the
worth of the car.
Nowadays, auto loan companies offer college student car loans. These loans come relatively cheaper, and with flexible terms and conditions. Both new car and used car are
available under student loans. A pre approved auto loan is a loan which an individual borrows before buying the car. This
gives the buyer ready cash in hand. Hence, the car dealers will offer them a better deal. Also, as the buyer has the loan
approved in advance, he/she knows how much is affordable, and this keeps expenses in check. Today, with such a range of auto
loans, almost nothing can keep you away from your dream car.
by: Shelin Michel
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