back to articles | May 08, 2023 | Dale Peterson
Categories:   Loan Calculators & Rates
Car Loan Financing
Like many other larger purchases, many consumers simply lack the monetary funds to pay for a car out-of-pocket. As a result, many clients opt for a used car loan or other automobile finance options, such as refinancing car loans.
Understanding the Basic Concepts of Car Loan Financing
Like many other larger purchases, many consumers simply lack the monetary funds to pay for a car out-of-pocket. As a result, many clients opt for a used car loan or other automobile finance options, such as refinancing car loans. There are several auto finance options that allow purchasers to use the vehicle while making payments on the purchase.
First Time Auto Financing
When purchasing a car and getting an auto loan for the first time, many consumers choose a new car loan. Purchasers can obtain an automobile loan from a lender of their choice, whom they may have prior experience with or a lender from the automobile seller who will always increase the interest rate – that’s where they make their most money when financing a car purchase through a dealership. However, it is important to consider that outside lenders or direct aggregators don’t add on to the interest rates, but they do rely heavily on credit ratings for auto loan approvals.
Yet, this deterrent can be avoided by going through a company, like myAutoloan.com, that works with all types of credit and all types of auto finance loans. There are very few online companies like myAutoloan.com. We work hard to please our clients by offering multiple loan offers from up to four different national auto finance banks and lenders for individuals with all types of credit.
Refinancing Car Loans
After a vehicle has been purchased and the loan amount has decreased, sometimes as soon as six months, many borrowers decide that it’s time to look into refinancing car loans – and yes, it is a smart option. Not only does refinancing car loans offer a reduction in payments but it gives individuals the option to choose a different lender, but it may also save borrowers some money.
By submitting a new loan application, borrowers may qualify for a lower interest rate. Ultimately, this can save the borrower hundreds of dollars on their monthly payment, obtain a better annual interest rate, and allow individuals to pay off their automobile loan more quickly.
Considering a Lease Buy-Out
Leasing a vehicle is an option that many consumers often overlook due to a lack of knowledge about this process. Unlike new car loans, car leases only require borrowers to pay a portion of the vehicle’s value for the time that the car is used by that particular consumer. At the end of the lease period, individuals can simply return the car, or they can choose to purchase the car and continue driving it with a lease buy-out. In this case, the residual value of the car is due at the end of the lease period. Benefits of a lease buy-out include lower monthly payments during the lease period, knowledge of the car's condition, and preference for the car's attributes and qualities.
Private Party Loans and Used Auto Loans
Other car purchase options may include private-party loans from preferred lenders or person-to-person loans. Some individuals may be able to get a car loan from friends or family with a preset interest rate or borrowing fee. In addition, individuals may receive better rates by borrowing through a private lender – especially one that can get you up to 4 loan offers from national lenders. Oftentimes, individuals who seek out these types of loans are considering any number of different loans while they search and narrow down the selection of what they can afford to purchase.
While used automobiles are cheaper in price, they are not in brand-new condition, may not have a warranty, and may have additional problems when sold, so please be careful and double-check everything. Get more information and helpful tips by going to myAutoloan.com. Here are a few tools to help you in your journey to finance. Interest Rate Chart, Interest Rate Estimator, Payment Calculator. Good luck and happy financing!