Getting behind the steering wheel of a brand new car is always a delight. But paying for a car can be a challenge. Unless you have rolls of extra cash lying around you will need to apply for a car loan to help you pay for your purchase. Here are four things you should know before getting an auto loan.
Easy monthly payments. The main benefit of getting an auto loan is the easy monthly payments. Paying in bulk can be heavy. Especially for young professionals who do not have enough money saved up. And even if they do have some cash, they are most likely going to need it for something else. Why burden yourself with one huge payment when you can spread it over a few years? Of course, check the interest rate. When it comes to getting a bank loan, the longer the term, the higher the interest rate. You may be paying a minimal amount monthly but when you look at the larger picture, half of what you paid for was just the interest. You may want to shorten the term to avoid high interest rates. A loan amortization calculator can help you determine how much you are actually paying per month for your car.
Leverage. By getting a car loan you are employing leverage. Business men understand this term well. Leverage is basically using other people’s time or money to get what you want. Even if you have the cash to pay for a brand new car, getting a car loan might be more beneficial to you in the long run. Why? Because you can invest that money instead of using it to pay for your car. That way, you can earn while driving your brand new car.
Coverage. Most countries including Malaysia have made getting car insurance mandatory for car owners. Many lending institutions also support this law. Why? Because in case something happens to the borrower, they will want to make sure that they are covered.
Promotions. There are many types of car loan promotions available today. Shopping is one thing almost all women love to do. But for guys, in order to get a good deal, you’ll have to go shopping as well. Not for clothes, mind you, but for a good lending institution. There are many lending institutions available around you. It is going to take a bit of effort on your part if you want to find one that will give you a good deal. Alternatively, use comparison websites (like iMoney) to find the cheapest lending institution around you.
Getting a car can be expensive. But you can make it easy on you. By getting a car loan, you can make paying for your vehicle more manageable.
