If you’re in the market for a new car in 2016, it’s always important to know your options in terms of how to finance the purchase. There are many ways to go about this, and the appropriate option depends on various factors including how much capital you have at your disposal. Make sure you think about the following options carefully.
If you have the money saved in the bank, this is the most cost effective way of making the purchase for a vehicle. Paying in cash directly out of your bank will essentially mean that you aren’t making repayments on the borrowed money and the transaction is finished at the point of sale.
This is an increasingly popular form of car financing. Leasing is essentially a long-term rental based on a contract for a certain period of time, during which monthly payments are made. There are various advantages that come from leasing. For one, it appeals to some buyers because after the lease is up, they can simply select a new model and start a new lease. It also means that the lessee doesn’t need to worry about the future value of the car and doesn’t have the responsibility of selling it as would someone who outright purchased a car. Lastly, monthly repayments are often lower than what you’d be paying on a car loan.
A personal loan from a bank or another financial body is usually paid off between 1-10 years and requires that the buyer makes monthly repayments, which can be quite high compared to a leasing option. The benefit is of course that at the end of it all, you own the car and when you take into accounts its value, you likely wind up paying less in comparison to other monthly repayment options.
Car dealers also offer car loans that can be beneficial to buyers. There are various loans available depending on the dealer. A secured loan is quite common and requires that you offer collateral against the loan in the case that you can’t pay it. A simple interest loan is also a good option given that the interest is calculated according to what remains owed. This gives you an incentive to pay off the loan more quickly.
This is generally not a good option given that many car dealers charge extra fees on top of the interest you’ll be paying on your monthly repayments. This does, however, offer you extra protection in some cases if things go pear-shaped with the dealer.
Always remember to speak to your accountant/financial advisor or at least discuss your options with the car dealership when you’re discussing the terms of sale. Selecting the appropriate car financing option is very important and can bring many benefits to you as the buyer. To get exclusive Mitsubishi finance deals in Melbourne speak to the experts in Chadstone Mitsubishi today. Our team will look into all your matters and will provide the best solution for your car purchase.