Don’t Have Cash to Pay for Your New Car? The Best Options Out There
Have you been eyeing a new car but don’t have the cash to pay for it up-front? In reality, most people can’t walk into a car dealership, point out their dream car, and then pay for it in cash. This is why it’s important to explore the different financing options available and pick the one that meets your needs, and works with your budget.
Here’s a look at some of the best options out there that will help you get into that car a lot sooner than you may have thought.
Pre-Approved Auto Loan
You’ve probably heard of a pre-approved mortgage, well you can do the same when it comes to a car. A pre-approved loan means you’ll know right from the start what your budget is, the purchasing process will move along faster, and you won’t have to worry about being turned down at the last minute. This can be a great option for a first time buyer who is looking at both new and used car loans.
Because you’ve never experienced car payments before, it’s a great way to break things down and make it clear what you can afford, and what kind of monthly payment you’ll be looking at. It will make the shopping experience much less stressful.
These types of pre-approved loans can take just minutes for approval and can even be used on a car that was leased and is now coming to the end of its term.
A lease works a little different than a loan. With a lease, you are just borrowing a portion of that cost. The lease value is determined by the amount the car will depreciate during the pre-set term of the lease agreement. What this means is that you will be looking at a much lower monthly payment since you aren’t borrowing the full amount. For many people, this is a great way to purchase a car and make it affordable on a monthly basis.
At the end of the lease term, you have the option of turning in the car, or purchasing it for the balance of its cost. If you’re the type that likes to get a new car every few years, this can be an affordable way to go about it.
Another popular option for those looking to purchase a new or used vehicle is to opt for dealer financing. This is a loan that is offered through the retailer, which is the car dealership. The loan is then sold to a third-party financial institution or a bank. The problem with this option is that the dealership often ends up marking up the bank’s interest rate so that they can make a profit on the difference.
Take Your Time Exploring the Options
These are just a few of the most popular options people turn to when purchasing a car. It’s a good idea to take your time and do your research before you sign any deal.