Benefits of Using a Loan for Your Next Car Purchase

The majority of car buyers finance this major purchase. Given the statistics, it’s likely you will be looking at options for car loans when shopping for a vehicle. There are many benefits to purchasing a vehicle with financing. Here are some top advantages to using a loan to purchase your next car.

When you finance a car, you can obtain more vehicle than you may have the cash for. A better car can be safer, more reliable and save on maintenance and repairs. With financing, you make a down payment, then periodic (usually monthly) payments for the duration of the loan. As opposed to paying straight cash for a car, down payments required when obtaining a loan are usually a small percentage of the price being paid for the vehicle.

There is flexibility in terms when financing car. Payments can be made over various lengths of time such as 36, 60 or 72 months. Interest rates that lenders offer are often flexible too, varying with credit score and the desired length of loan. In an economy with low interest rates, your money may be put to better uses than paying cash for a car. Car loans free up that cash so that it may be used for higher interest earning investments, businesses or home purchases.

If you have poor credit or little credit history, financing an automobile may look less attractive. Higher rates are charged to those with low credit scores due to the increased risk to the lender. With a poor credit score, you may need to put down a larger sum of cash in order to keep the payment affordable. However, when you make consistent on time payments, your loan will help improve your credit score over time.

By offering greater flexibility and purchasing power, car loans play a critical part of the automobile purchase process for most.

Car Loans Aren’t Scary

As a car dealer, I often hear customers say that car loans are scary. Often, one of the biggest worries that people have is about their credit. This is normal, because a car is a big purchase for many individuals. Most folks know their credit score influences the final amount of their monthly loan payments. Why does that matter? Let’s talk more about the process.

First there are some important terms to know when talking about loans – down payment, principal, interest rate and loan term. The down payment is the money you pay the dealership toward the overall price of the car. The difference between the loan and what people can pay right away is called the principal. The interest rate is how much people pay the lender for loaning them money. The loan term is how long the borrower has to pay back the loan. Because monthly payments are determined by both the initial value of the loan and the interest rate, the lower interest rate we can secure for a customer, the lower the monthly payment can be.

As a dealer, I have access to great deals and can get customers the best car loans. Customers get their car shopping done in one stop. The dealership is here to work with you. My goal is to build a relationship with customers where they know they are getting treated right from start to finish. I work with customers so they get the right car, for the right price and secure their car dreams with the right loan. Cars are an investment and car loans can help make owning a reliable vehicle go from dream to reality.

I’m here to tell you that my dealership makes buying a car and getting a loan a stress-free process. We want you to drive away, happy that we were a part of your journey.