Many people living in cities can’t always access public transport for their daily travel. Public transport doesn’t provide comfort for the travelers. Owning a car provides very much comfort in this situation. But we may not have enough financial status to buy a new or used car with instant money.
Compare New and Used Auto Loans
There comes the need for car loans. Many sources are there to provide short term or long term car loans at a fixed rate of interest. These sources include lenders and banks and sometimes the dealership can provide you with a loan. The interest percentage and loan period varies for used cars and new ones. The interest rates of used cars are comparatively higher than new cars.
On average, current used cars loan rates are 1.5 percent higher than that of new cars loan rates.
The interest rate of new cars is comparatively lesser. Banks and lenders offer less interest rate for promotional reasons. Also rebates and other incentives are available for new cars. Getting finance for new cars is quite easy because most of the car dealers offer finance for the customers.
They will very likely provide loans. But in this situation the rate of interest must be high as comparing to other financial sources. In such a situation of major purchase, we should have good planning and research. Once we purchase, we are then committed to a long term financial burden. Estimation of motor car loan payments must be made from the beginning itself. For buying used cars, lesser payment amounts are preferred.
Short Term Auto Loans
We can buy used cars with short term loans. The loan period of used cars ranges from 24 to 48 months while for new cars it ranges from 24 to 72 months or higher. On average, used cars loan rates are lesser for short term loans. Before proceeding for a loan we must compare the loan rates of various lenders and banks. They provide good credit car loans for potential customers. This comparison depends on many factors.
New cars are provided with low interest rates, but used cars that are 1 or 2 years old will also get loans at lower rates. Next factor is the term duration. If the period of your loan is long, then the interest rates will be lower. The third factor is the money down. If we put some money down then we can attain a low interest rates.