Get The Right Car Finance

These days when you step into a car showroom, there will be two

major things that the dealer will be offering you. First he will

be offering you cars, and secondly he will be offering you

finance packages. This is how you should look at it. The fact of

the matter is you may probably wouldn't buy a car from your

bank, even if they started offering them, so you may wish to

apply the same scrutiny to the finance packages available at the

car dealership and choose to buy only you car there and the

finance package elsewhere.

It may be that there is nothing wrong with the finance being

offered at the car dealership and in many cases this will be

true. However, you must be aware that just because you buy your

car there, does not in any way imply that you have to use the

finance options and terms that they are offering. You are always

free to take a loan from somewhere else, such as a bank, and pay

for the car outright, and then simply make the loan repayments

to the bank as with any other loan.

You should be careful to find out exactly how much you are being

charged for car finance. The primary way to calculate the charge

of any credit is by using the APR or annual percentage rate.

This calculates the cost of the loan using a standardised

formula and all lenders must use the same method of calculation.

However, just because a car dealer's APR looks attractive does

not mean your search is over. You should also, always find out

how much the car would cost if you paid in cash. Remember that

providing a cash discount is exactly the same as charging extra

for credit. If the cash price is lower, then you may be better

off getting the loan from elsewhere and paying for the car with

cash, this will take advantage of the better price and you will

have a smaller amount to pay back to your lender.

The other thing you should look out for is down payments and

closing payments. These are payments that are paid at the

beginning or end of the term of the loan, and while the monthly

payment terms may be attractive, it could well be the case that

there are large additional payments to make and you should not

forget to calculate these in when pricing the finance.

Car finance can be almost as important as the deal you get on

the car itself and you should always regard getting a good deal

on the financing as part of the process of getting a new car.

About the author:

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk

/ and also http://www.ukpersona

lloanstore.co.uk. Select Loans have information and links to

certain suppliers in the car loans

section of the site.

Written by: Joseph Kenny