For most folks, getting a car has become more of a necessity than just an ambition. Be it driving yourself to work or to receive your friends from the airport, having your own four-wheeler gives you a world of freedom. Achieving this freedom, however, does have its struggles. Being one of the most expensive industries the ever increasing car prices coupled with huge maintenance costs do take its toll on the wallet. Getting the right car loan, thus, becomes of paramount importance. Although the market provides a host of car loan options, you must be the judge and lawyer both, in choosing one.
Getting finance for cars
The simplest form of car loan is where the bank or the finance company lends you the money to buy your car, both from the primary marketplace as well as secondary. The loan might be secured or unsecured, with the latter usually carrying higher percentage of interest. Keep in mind that you must have a sound credit history before you can even think of having your car loan approved. Your timely payment of credit card bills and loan portfolio is thoroughly verified, after an elaborate documentation procedure. If found suitable, the financer approves the loan, with the amount cleared within a few days. The vehicle purchased becomes the security of the sum lent out. Popular banks and finance companies have attractive car loan offers, with reduced interest rates, flexible re-payment periods and pre-payment terms. As an alternative, companies have started coming up t provide cars on finance with zero interest rates, and these companies are gaining popularity. They arrange for the entire finance, as you own the vehicle without any headache!
Financers allow hire purchase too, where you pay the financer the entire amount as periodic payments. And the end of the term, when the entire amount is paid, the ownership of the car is transferred from the financer to you. Other options include borrowing a car for a fixed term from a financer, in exchange of a periodic rent, and at the end of the term, choosing whether to buy the car or extend the term.
As part of employee engagement program, employers too, now allow employees to purchase cars, where the cost is recovered from the employee’s monthly salary. This is a popular way of having your car financed easily and without much documentation and with preferential interest rates. It also comes with added tax benefits and enhancing the cost-to-company of the employer. If however, the employees leaves the organization within the loan period, the remaining amount will be fully recovered from her based on the settlement terms agreed upon before entering the agreement. So if you have such a facility of car financing provided by your employers, go for it!
With a plethora of options available for car loans, you must not forget to scrutinize the terms and conditions, before actually signing it. Important aspects to keep in mind are interest rate changes with term period and pre-payment charges. Once car financing and the documentation is sorted out, go get the wheels rolling. And don’t forget to drive safely!