Yet, as we always emphasize the importance of knowledge and understanding of your options before starting with the comparison and selection process. So, in order to help make the decision easier and favorable for you, here is a little help. Our experts have sorted out some of the common financial options you have, and have explained how each one differs from the other.
If you are looking for long term financial benefits, numerous car dealers and even manufacturers are ready to offer you rebates or incentives. Rebates can considerably lower the overall balance of your current car loan. The nature and amount of the rebate can vary from car to car and dealer to dealer. One major problem with rebate, however, is that it is only offered on selected models, and therefore, your choices are limited.
Taking advantage of the pleasant economic climate, a number of financing institutions offer a low interest auto loan. The moniker speaks of the benefits it offers. Due to lower interest rate than usual, your monthly payment is quite minimal as compared to what you would have paid on a regular loan. However, the amount you end up paying is comparatively higher. Therefore, it is a good option but for those who are looking for lower monthly payments rather than long term benefits.
Although it is not a direct car financing option, it is becoming highly popular among car buyers. You can take out a secured or unsecured personal loan and buy a car by paying in full. You own the car and now you just have to pay the lender back as per the schedule. It is hard to see the benefit here but becoming the owner instantly definitely has its perks. More importantly, this option gives you a definite spending limit prior to the purchase.
In case of leasing, the bank or any other financial institution buys a car from the dealer for you. The bank then leases it to you and you now have to pay a monthly amount which is much like paying rent. The term of lease is specified and you have to return the vehicle once the term is over. Leasing is a suitable option for people who like to change cars very often or for those who know they will have to relocate or move after a certain time period.