Buying a car can be exciting but complicated. Since it’s a major purchase, you need to be prepared. You’ve done your homework and you’re ready to make your purchase, but what is the best way to finance your next vehicle? To help you get started, here are the top five sources for financing your next car purchase.
Personal Bank
Your local banking center will offer competitive rates for your loan. These are usually listed on the bank’s website. If you choose to go with a personal bank for your loan, it’s better to deal directly with them in person. This can prevent any confusion over terms and make it easier to manage how your personal information is shared. Your personal banker can often let you know if the price you are paying for the car is too much. However, it can be inconvenient to make a special visit to your bank versus getting your financing through the dealership, and there may be credit score limitations as well.
Credit Unions
Much like local banks, credit unions will offer competitive rates, and it would benefit you to make a personal visit for your loan. However, credit unions only offer loans to their membership. Members all share in the ownership of the credit union. As a nonprofit organization, they are able to keep overhead expenses lower and may be able to offer better rates. Like banks, the drawback is lack of convenience. You will need to set aside time to visit them, whereas funding your loan through the dealership would take less time from your schedule.
Insurance Companies
When you utilize an insurance company to finance your car loan, you are actually using a bank that is an affiliate of the insurance company, usually with a similar name. They offer competitive rates primarily based on your credit. However, they may have mileage restrictions or a minimum amount set for how much you can borrow. It may be difficult to locate the correct page in their website so you’ll need to search the site for how to get a car loan. To begin the process, you fill out a loan application online, and after approval, it’s mailed to you for your review and signature. Once they receive your signed document, the check is mailed to you.
Credit Card
Many car dealers will accept credit cards for payment or partial payment for financing a new car. However, a fee may be passed on as part of your purchase since this is a fee the dealers must pay to the issuers of the credit card.
Dealership Financing
Financing a new car through the dealership is the most convenient way to purchase your vehicle. Since you are already on the premises, processing time is low, and the loan can be handled on nights or weekends. Once you receive financing, the dealership may retain the loan, or they may sell the loan to a bank, credit union or another finance organization. You will be notified if there is a change in where you should make your payments.
