• Play Cautiously With Auto Loan

    By:Alevoor Rajagopal

    Buying a new car is never an easy task; for most of us, it is stressful, time consuming, and costly. Barring buying a home, new car purchase is unquestionably one of the big ticket purchases perhaps all of us make. Buying a new car, however, is not a straight forward activity, especially if it is your first car. The first thing that you should decide upon is should you buy a car with cash or finance it. Many car dealers arrange for finance through their regular lenders. However, you can give a deep thought to exploring to go through a credit union or buy it straight away. In all the cases, what you need to be watchful of is the cost from all those finance options which is always in addition to what the dealers charge you.

    Before signing on the contract paper, make sure that you have completely read and understood their terms, conditions and all surprising charges. If you are unsure of something, don't hesitate to show the terms/contract paper to a friend. What is most important thing for you to understand before signing on the papers for buying a new car is that the transaction is final once you sign on the dotted line. Making a hasty decision can be really an expensive move than buying a new car itself. Buying a new car and car loan are all about patience, perseverance preparation and some nerve wracking hard bargaining. The kind of seriousness, effort, and decision-making required for buying a new car can be compared to buying a new home for similarity of the processes involved. Your new car buying can be a pleasurable experience only if you are shrewd enough to shop smartly and have time to do it.

    New Car Loan- Points to remember

    Judging car finance, given the myriad of lenders and schemes, can be equally disconcerting as judging a car itself. A new car financier will always extend loans to buying a new car. However, when negotiating with them, remember not to focus too much on the monthly payment, which the lenders always push you towards. Let the fact that a new car depreciates very rapidly in the first few years be upper most in your mind.

    Many car finance deals fall apart midway not just because of your confusions but also because of lenders. Try and reduce finance charges. The rule of thumb is to subtract 12-20% from the total on account of bargain margins and other charges. If the lender requires credit insurance, you must add this also into the cost of the credit. And then there are other overheads that you will have to bear with. Online car finance lenders have lower overhead in comparison to banks and credit unions which you can explore.

    All said and done, the biggest advantage of buying a new car is the modern technology, warranty and the standard safety features. Buying a new car is not at all a wrong decision only because of high price tags, depreciation and interest rates. Also, buying a new car isn't ever a simple decision to make, but with the complete knowledge and perseverance, you can be able to make right choices and drive proudly in a new car without burning your pockets too.

    Alevoor Rajagopal, MBA, a business consultant, voices for fair practices in used car deals. He also writes passionately on showcasing individuality with Free layouts