For an average person, buying a car from one’s own resources is not very feasible. With the kind of prices that new cars and used cars command, financing becomes a viable option. You will find many finance companies offering auto loans including the dealer from whom you intend buying your car. Finance may come easy, but there are complications involved in the process. You may later find yourself in a fix over a contract that you cannot afford. Advantages of Dealer FinancingThe main advantage of dealership financing is that of convenience. Financing is quick, as it is as easy as walking in the car showroom and driving out in a brand new car. As compared to other forms of finance, dealership finance is fast. There are lesser hassles involved. Dealership financing comes at competitive interest rates, if you qualify certain conditions. Disadvantages Certain information is kept under wraps by the financier and not disclosed to the borrower. Financial information is available on certain slow selling models that normally have a low resale value. These are also limited to dealer stock. In this case, you may have limited options to color and style. Your finance agreement may involve hidden fees. The financing options may have larger prepayment penalties resulting in higher down payment. You may also have to bear higher late fee penalties for payments made beyond the due date. You may also have to pay a higher interest rate in case of late payment. Most dealership loans are compounded interest loans, so work out the actual interest rate. 0% interest rate offers are offered to eligible borrowers, which is a small group of persons. According to a study, very few people actually get the 0% rate on 0% offers. This depends upon the credit rating and many do not qualify.
Posts Tagged ‘Hassles’
0 Down Car Financing & Loans For People With Bad Credit & No Money Down!
December 5th, 2009Would you like to get approved for a “0 down” car loan?
There are ways to get this done even if you have bad credit. Getting a car loan with no money down or “0 down” is very simple if you understand the reasons why dealerships ask for down payments and how to avoid having to have one. Too often people believe what they are told by finance managers and car dealers, when in fact, if you know just a few key points, you can avoid all of those hassles altogether.
Why would a car lot want a down payment?
Dealerships use down payments generally as a way of adding extra profit to the sale of a car. That’s why they’re usually something that are flexible. A car salesman may hit you up for a $3,000.00 down payment just to see how you react. They start you off high and to see how much you can come up with.
It’s a game!
When I was at my first dealership, I was trained to “prime” the customer for a down payment at the end of the test drive. The way that I was trained to ask the customer about a down payment was by saying, “Mr. Customer, what were you thinking about doing for an initial investment? $3,000.00 or $4,000.00?” The reaction from the customer was always abrupt and they were taken off guard by this question. What it did though, was “raise the bar” and after being asked about $3,000.00 or $4,000.00 down, it made the idea of $1,000.00 or $2,000.00 seem alot lower. That was the only purpose for asking the question… It’s called “working a customer for cash”.
The more down payment that a car dealer can get you to agree to, the less money needs to be loaned on the car, which means that the dealer can make more money.
The reason they can make more money when you have a down payment is because the lenders only allow a maximum amount to be loaned on the car. If a dealer can max out the amount that the lender will loan PLUS get a down payment for you…
BAMM!
You’ve just been had. It’s sad but true, but that’s the way that some car dealers still work today. It’s an old school way of doing business, but sadly, it works.
So, how can you get a “0 down” car loan when you have bad credit?
You have to remember that there’s only two reasons that you would ever be asked for a down payment, even if you have absolutely horrible credit. The first reason is simply as illustrated above… the dealer wants to maximize profit on the sale and tries to convince you that you have to have money down. The second reason is that the dealer has too much money in the car and the lender won’t advance the amount needed to match the sale price. Getting a good deal on a car certainly helps.
Different lenders have different guidelines and there are good lenders that will advance the full amount needed for you to buy a good vehicle with bad credit. 0 down is commonplace with these types of lenders. There are good lending networks online that will allow you to find lenders that will approve you based on your individual credit history. This makes getting approved, and getting approved for 0 down car financing very easy. The best part is that all you have to do is provide your basic information and don’t have to go through a long credit interview process and it’s all in the comfort of the chair that you’re sitting in now.
There are benefits of putting money down.
Down payments are not evil. They should not however, be a part of the negotiation process of buying a car. Even when you do have a down payment that you want to use to lower the amount financed, which lowers your payments, you should always negotiate the sale price and interest rates based upon having 0 down.
Don’t ever tell a car dealer that you have a down payment until after you’ve agreed on the price of the car!
That is CRITICAL to getting a good deal, regardless of credit. It will however, make it easier to qualify for a car loan to have atleast the amount of your first payment to put down. It’s just shows good faith in your intentions to pay the loan.
By: Jason Lanier
Easy Unsecured Loans: Borrow for Easy Collateral-free Money
October 27th, 2009In case you need money that will suffice to your financial needs but do not have any collateral to pledge with the lender, unsecured loans can help you. If you are hesitating due to the hassles caused in case of unsecured loans, it is time that you look for easy unsecured loans.
Easy unsecured loans are available to borrowers who can not or do not want to pledge their assets for the loan. This makes it very easily available to the borrowers who do not have their own assets like tenants and non-homeowners. Also, the homeowners who do not want to pledge their assets for money can take up easy unsecured loans.
Through easy unsecured loans, the borrower can take up an amount in the range of £1000-£25000 depending upon his need and repayment ability. The repayment of easy unsecured loans has to be done in a term of 6 months to 10 years. The rate of interest is slightly higher than secured loans as no collateral is attached, but this can be lowered by comparison of loan deals that are offered.
Easy unsecured loans are called so as there are no hassles attached to borrowing these loans. Only the basic conditions have to be fulfilled for approval of the easy unsecured loans. These are a regular employment of the borrower, regular residence, age of over 18 years and citizenship of the UK.
Easy unsecured loans are available to bad credit borrowers as well. They just have to search online for good deals. Due to stiff competition in the market, they are offered low rate deals. They can compare and avail easy unsecured loans.
Easy unsecured loans can be used by the borrowers for any purpose they like. Debt consolidation, home improvement, car purchase, wedding expenses, or educational expenses etc can all be financed with easy unsecured loans.
Easy unsecured loans have changed the way borrowers take up loans. Even without pledging collateral, they can fulfill all their needs easily.
By: Simon Peyton
