What to know for your first vehicle purchase

You should be familiar with your financing options before you head onto the dealer’s lot.

06:53 13 February 2014

If you are purchasing your first vehicle, you might be wondering how the process works and what you should know so that you get the best financing deal. There are lots of options available, especially if you have good credit and a decent initial payment. Here are a few options:

 

• Bank financing—this option allows you to select your preferred lender. You might even consult with a few different lenders to find out what kind of interest rates you can receive. You will know who to talk to if you have questions or concerns at any time with the loan. The lender will be more impartial, you can take the loan to any dealer.

 

• Dealership finance—this type of financing is pretty convenient if you are shopping around and have finally found the vehicle you want. Many dealerships work with lenders who are available over the weekends so you will not need to wait as long as you might with a bank financing option. With this option, it is more important to be aware that you should negotiate terms to get the best deal.

 

• Personal loans through friends or family—if you’re blessed to have friends or family with the ability to front you the money for a vehicle purchase, you can offer to negotiate a deal for repayment that may work better for you, and your friends and family end up with more money than they initially loaned. If anything goes wrong with the repayment though, it can cause stress on your relationship so be careful to use this option only if you know you will not have issues with the repayment. You can offer to agree to a legal contract if it reassures your friend or family member as well.

 

• Resources—do not forget to use resources such as legitimate online funding for comparisons.