Whether you are purchasing a vehicle for the first time, replacing your old vehicle with a newer one, or if you need to purchase an additional vehicle, there are various key decisions you will need to make.
When it comes to vehicle purchase, you need to work out the best type of car or vehicle for your needs. In addition, you need to decide whether you are better off going for a brand new vehicle or a used one.
Another very important consideration when purchasing a vehicle is how you will pay for your purchase. You may be lucky enough to have money saved up that you can use to purchase the vehicle outright. You can, also, consider trading in your old vehicle to get some money toward buying a new one. There are various options available when it comes to funding the cost of a new vehicle, although factors such as your income and credit score will determine which of these you can access.
- When it comes to purchasing a used or a new vehicle, you will find a variety of finance options open to you. Your circumstances, credit score, income, and other factors will determine which of these solutions is the best suited.
- One of the finance options you can consider is dealership finance, which can be obtained if you are purchasing a new or used vehicle from a dealership. Often, the requirements for this type of finance are not as strict as for a regular bank loan because the car is used as collateral. So, if you start missing payments regularly, you risk losing your vehicle.
- If you decide on dealership finance, you need to make sure you compare rates and deals. In addition, make sure you know exactly what sort of deposit you need to put down and what your monthly repayments will be. You can use a car payment calculator to help you work this out.
- If you plan to purchase a used car privately, you may need to consider going to your bank or to another lender for a personal loan or a car loan. Either way, with most standard lenders, you will need to have pretty good credit because these are unsecured loans. In addition, you will need to meet the income requirements and other eligibility requirements to be considered for this type of finance.
- You may be able to get a loan from a sub-prime lender if you have damaged credit but you need to remember that the rate of interest charged by these lenders can be extremely high.
- A final option you can look at is to use a credit card for your vehicle purchase. The cost of the vehicle will determine whether this is a suitable option. If you are buying a cheap used car for a few hundred dollars, this could be an option. Likewise, if you have a high credit limit on your card, you can use it to fund your vehicle purchase.