The Deal On Wheels: Know About Car Loan Rates
Category: Auto Loan
Car makers are ready with several new launches coupled with attractive deals luring consumers to step into a car showroom and step out having bought a car. If you, too, are contemplating a new car and an auto loan to go with it, you can approach either a bank or an auto finance company. If youâre a savvy auto buyer, you know that getting a good deal involves more than snagging a great price. Banks charge interest on just about every type of auto loan; to get the lowest auto loan rate, you might have to speak with different finance departments and request quotes. This is a smart move, as your interest rate determines how much you spend over the life of the loan.
Before you proceed on buying a new car, itâs important to know some facts about auto loan rates. We help you decide.
Strings attached to zero-percent
Zero percent may come with some obligations attached to it. Zero percent interest on a new car can be a terrific deal. But depending on where you go, there might be a few catches. Some places only offer these attractive new car rates on short-term leases or require a sizable down payment. And to compensate for any financial loss, the dealership might inflate the price of other costs, such as extended warranty or the add-ons.
Myths about zero-percent financing
Consumers often think that zero-percent financing is always the cheapest option to go for. If youâre applying for a new car loan with excellent credit, you might qualify for zero percent interest. Do remember that in addition to offering zero-percent financing on new cars, some manufacturers offer factory rebates. And typically, you can only choose one or the other. Paying no interest might seem like the better offer, but if you skip zero-percent financing and take the factory rebate, the savings you receive after subtracting the rebate from the sale price might be greater than the savings from zero-percent financing.
Banks provide better rates
Even if you qualify for a low-rate new car loan, donât think that your dealer quote is the best you can do. The truth is, many dealers paid the interest on car loans to boost their profits. Youâre better off securing your own financing at your bank. This does not involve the middleman and results in better interest rates of new car.
Additional savings benefits
Do you want to purchase the newest model of your favourite car? Not only new car loan rates cheaper than used car loan rates, but short-term loans can help you save money in the long run.