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FINANCING :-
Financing refers to the act of obtaining or furnishing money or capital for a purchase of something like automobile, property, etc. Financing a car depends on three conditions :-
• Either your are asking dealer to finance the car for you based on your credit score that is you will get Auto loan. This auto loan will range from 3 to 5 years monthly payment. The monthly payment amount will depend on the interest rate, length of the loan and amount of your down payments. In this you owe the car but the title of the car will be sent to you when you make all the payments.
• You will purchase a car on lease from your dealer. Each bank will have different terms and conditions to give a car on lease. The desired time limit for lease is three years. Most auto lease contract will include the limit of miles you can drive in a year (decide according to your requirement). In this lease contract you have to pay certain residual price as security deposit which you will get back when you return the car to the leasing company (depending on the condition of the car).
• Third condition is that you pay for the car price in cash from your own.One should avoid the following mistake while making a finance decision as it will cost you money. These are:
• Negotiating the monthly payment rather than purchase price of a car, as this forfeit your capacity for negotiating a lower purchase price.
• Letting the dealer define your credit worthiness will lead to ending up with a loan of high interest rate. One should check their own credit by obtaining preapproved car financing from a bank or credit union.
• Making the wrong choice between cash rebate and low interest rate loan as one should know that rate varies from offer to offer. Also one needs to have a very good credit score to get a manufacturer's low interest financing.
• Financing the cost of add-on which one can buy separately.
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