Car Finance

Car Finance

Money/finance which is procured as a debt through any financial Institution for buying a vehicle mainly a car is what can be termed as Car Finance.

Necessity of car Finance

Nowadays car is not a luxury item but a necessity for everyone, especially working people who commute each day.

Everyone dream of buying a new car, when they reach a particular stage of their life. But Finance for the car is a significant aspect. You cannot afford a car whenever you desire for one. Nearly 70% of the people require the support of a financier to buy any car, whether new ones or used ones.

Types of Car finance

a) Loan: - In a loan, the vehicle is registered in your name & you are the owner using it. But you have to pay a down payment at the time of purchase of the vehicle. Then you have to pay your monthly installments termed as EMI’s, which includes the interest of your borrowed money. You can be free of all the debts once you pay off the loan. You may get tax deductions for your car loan.

b) Hire Purchase: The car is registered in the name of the financier. It is like you are hiring a car for your personal/company use. You can become the owner of the car after you have paid off all the monthly installments. No tax deduction regarding this.

c) lease: - A car is   taken on rent for a particular period of time from a financier. After your personal/company use, you can return it to the financier who is the   sole
owner of the car. Here also there is no tax deduction. You have to pay the rent monthly or weekly according to the protocol of the leasing company.

Car Financing Companies

It is important to select your choice of car model & stick to it till you find the right supporter for money. Now supporters come in mainly three forms Financiers like bankers, car dealers & car manufacturers. Car dealers are gaining popularity in the conventional system. You can search for car dealers in your magazines or dailies & also online. By going online you can do a thorough comparison of all the car dealers.

Car dealers

Car dealers are people who buy cars from the manufacturers and sell it at a little higher price than the market value. But they should procure the permit from the manufacturers. They are people who are doing a business with high competition. Once you get there you should see that you will not fall in their trap. So what you can do is decide on the model of the car whether old or new before you contact them. Then as a next step, you should stick firmly to your budget. After that decide on a car dealer & reach there as soon as possible, before the bid gets over.

The interest rates will be high as this cannot be avoided. Not even new cars, even used cars are also available here. The main advantage is they provide finance if you have a bad credit too. But always be on the look out!