If you are currently in the market for buying a car that is new or at least new to you, then you have a couple of decisions that you need to make. You have two options here and one of them is to pay for the car outright with all of the money that you have saved up over a number of years or you can finance it out over a period of time that may make it more manageable and more affordable. It can be tempting to walk into any car showroom and put the full amount on the counter and drive out but there are a number of disadvantages to doing this.
Many Australians take out car loans every single month of the year and they do this because they have done their homework and they understand the features and benefits of doing so. If you are a little bit on the fence when it comes to paying in full or taking out a loan to purchase your new car then the following are just some of the reasons why it makes a lot more sense to finance it.
- You enjoy lower interest rates – Car dealerships really do want to get the cars out the door and so they offer you a very competitive interest rate that is much lower than you would get at any of the lending institutions on your high street. Some interest rates are so low that it just wouldn’t make sense for you to pay in full because of the minimum amount of interest that you would pay over the course of 3 to 5 years.
- You get to keep your savings – It has probably taken you a considerable amount of time to save up the lump sum to be able to buy a new car and by financing the deal, you get to keep your savings and spend them on something that can really put another smile on your face. You could treat yourself to a well-deserved vacation that you have been putting off for some time now or you could spend your money on putting extras on your new ride.
- There is no collateral needed – You will not have to put up any kind of collateral to be able to take out a car loan because the card itself will act as the backup plan in the unlikely event that you run into difficulties and you cannot pay off the loan every single month. This takes a lot of pressure off your shoulders and so you can go ahead and sign on the dotted line knowing that you can easily make the payments then you get to drive around in your new car.
There is absolutely no doubt that taking out a car loan offers you many different features and advantages. You still get the car of your dreams but you still keep all of the money that you saved up in your bank.