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How to Get
a Cheap Car Loan
Moneyextra.com has come
out with a guide to try and make the
process of finding a car loan just a
little easier. The financial service
experts over at Moneyextra.com say that
the most popular kind of auto loans are
those that come from the dealerships in
the form of forecourt finance called hire
purchase.
They say that the hire purchase car loan,
where the loan is a secured loan because
it is against the car that you are buying,
is the one most people go for because it
is readily available where you buy your
car. They say that the experts predict
that somewhere around 400,000 cars will be
sold this month, and most of those will
end up in a hire purchase forecourt
situation.
This is also the most expensive type of
car loan because the average interest
rates are higher than most other places.
Sometimes they may offer you a deal of 0%
financing, but there is always a catch.
You will find that you need up to 40% of
the car down, or it is for a limited
number of months whereas after that the
interest rate skyrockets, it depends on
the deal.
You can also do a contract purchase or
lease deal, where at the end of the lease
you pay for the car, swap it out for
another, or simply walk away. These are
fine if you don’t mind having spent the
last three years or so paying for a car
that you now have no equity in, but your
payments will be less than if you outright
finance it.
The best thing you can do is get a
personal loan from your bank or credit
union to purchase the car before you go to
the dealership. The interest rates are
usually lower, in fact, they can be as low
as under 6% while dealership rates are
running over 7% or more. You are also
considered a “cash buyer” which gives you
more bargaining room than if you go in
looking for financing as well, so you
usually get a better deal on the car.
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