AUTOMOTIVE FINANCING: WHERE TO GET IT?

2007-04-17 04:46:40

( Financial )



Bank and Credit Unions

Bank, credit union, dealers and other financial institutions are main sources of automotive financing. Financial institutions like banks and credit unions offer lowest rate in automotive financing in the industry. If you are lucky you these institutions will approve your loan before you even pick the car of your choice in car showrooms.

It is best to shop for interest rates of automotive loans from banks and credit unions in your area. It will give you an idea of the current rates offered by various banks and credit unions in your area before you decide what institutions to negotiate your loan. Credit unions offer lowest rates than banks. However, the difference in rates with banks is only minimal usually an average of one percent to two percent. You can still save from the small percentage of difference in interest rates given the huge amount of loans needed in automotive financing.

Car Dealers and Manufacturers

Car shoppers, particularly those who are very busy with their works to process auto loans with formal financial institutions, favor dealer financing due to the convenience it offers. Car dealers and manufacturers offer automotive financing schemes to car shoppers usually at a higher rate. However, there are dealers who offer best deals in automotive financing. So it’s better to shop around for the best deals before you decide on one particular car dealer.

Home Equity Loans

Home equity loan is another option to source your automotive financing. It offers a better interest rate and it has the potential for a tax deductible feature. You just have to make sure that accessing automotive loans through home equity will not cause you to lose your home. Also, take into considerations the various fees that you have to pay in using home equity loans to avoid depleting your tax savings.

Choose the source of automotive financing that works for you in terms of accessibility, affordability and convenience. Just make sure that you have done your research first on the details of financing schemes offered by various financial sources before you finally decide which one to choose.


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