Options To Consider When Buying a Used Car
Purchasing a car requires having an appropriate budget to match the car you need. When planning to buy a used car in Canada, there are various finance options. Understanding one that matches your needs is very important. This will ensure that you end up with a car of your dreams without getting hindered by lack of enough money.
Here are some used car financing options to consider.
Personal contract financing
When you opt for a personal contract to finance your car purchase, be prepared to pay back in installments over an agreed period. This can range from three to five years. After the contract expires, you can make a balloon payment and purchase the car right away. alternatively, you can return the vehicle to the dealership. If you do this, you can put the equity invested to become a deposit for your new car purchase.
keep in mind that you incur extra charges if you exceed the mileage. Additionally, excessive wear and tear on the vehicle such as scratches makes you liable to pay additional costs. When planning to take the car abroad, some personal contract financing companies limit the days you take the car outside the country. you have to request permission before taking the car abroad
Financing from online lenders
You can also get financing to buy a used car from online lenders. All it takes is to find an approved auto loans leasing company to get you an appropriate loan to finance your car purchase. The beauty of getting car financing from online lenders is the convenience. you can apply to get financing 24/7 with fast approval.
Dealership financing
When planning to buy a used car, the best place is to consider a reputable car dealership near you. Finding a one stop dealership where you can find a car matching your needs as well as appropriate financing is a smart idea. Reputable dealerships have business connections with financing institutions that can offer car loans.
Hire purchase financing
This type of car financing resembles the personal contract purchase. However, here the last monthly payment you make makes you the final owner of the vehicle without requiring a balloon payment. with this payment option, be prepared to pay more every month. This is because you’re paying the car instead of covering its depreciation costs.
The loan is secured against the vehicle. And, you are required to deposit about 10 percent of the total cost. Then, you’ll make fixed deposits every month for a specified period of time. The car is not yours until you make the final payment. you arrange a car hire purchase agreement with a dealer. arrangement is convenient with used cars being less competitive than new models.
Bank loan
Taking a personal loan from a bank to buy a used car is a bit more expensive. This is because the car is not used as security for the loan. So, the lender is at great risk hence the high charges. Fortunately, you gain control of the car immediately. And, you can sell it when you need some quick cash.
Manufacturer financing
This is ideal for those looking for car bargains. Cut throat competition in the car market is driving car makers to offer new cars on credit. These are usually offered at low interest rates. Some car makers offer car deposit distribution , interest free finance deals, and no-deposit deals. New cars that are not yet popular are usually available through this finance option.
Credit union financing
When planning to buy a used car but perplexed on where to get financing, consider a credit union loan. The beauty of this form of car financing is the lower interest rates with less loan requirements compared to bank loans. In addition, credit unions have good relationships with members. The chances of getting the loan approved are higher than other forms of loans.
Guarantor car financing
Lastly, you can also get car financing using a guarantor. This type of car financing option is usually for people with poor credit. On application, you have to name a guarantor. This person agrees to make payments just in case you miss.
However, you still have a responsibility to clear the loan. Having a known guarantor lessens the risk of the finance company. Drivers without appropriate credit history can also use this finance option. keep in mind that the terms for each finance company varies.
Bottom line
Today, finance is not an excuse not to cruise your dream ride. There are various finance options from which to select one best suited to your situation. You can get financing from your bank, use your savings, or get from the local dealership. Regardless of the car brand or model you want. You can always get financing to purchase your dream ride.