If you are deciding to buy a new or used vehicle for your daily needs on loan, then you must know which loan option is beneficial for you. There are several factors which you should keep in consideration while opting a new or used car which includes the cost, insurance rate and the condition of the vehicle if it is used.
Common Places to Avail Auto Loans
There are a number of options available for customers for securing their new or used car loans which are mentioned below.
The easy and common route to securing the financing for your auto loan are banks. There is the large pool of capital available in a number of private and commercial banks. The banks are the best place to avail loan because of their lowest interest rate.
- Car Dealerships
The second option is to opt car dealerships for financing your new car and you will get the loan quickly by considering this option. But keep this in mind, that these dealers will have their own profit included while offering you a loaner vehicle from the lender.
- Credit Unions
The last but not the least option available is the credit unions. The interest rates offered by these organizations will be competitive. But for this you need to be a part of that union i.e. membership of the union is the must.
After discussing where you can get the auto loans. Now let’s start discussing the difference and benefits in availing new car loans and used car loans.
New Car Loans
We always wanted to buy a new car with the pristine condition which comes with all latest techs installed in the vehicle. There will be nothing to worry about maintenance of your car and plus you will have a manufacturer warranty. When you opt new vehicle loan, then there are the following benefits you will get.
- Lower Rates
The first advantage is that you will get low-interest rates than the used ones as said by FTC (Federal Trade Commission). But for new cars, you will have long financing periods.
- Special Rates
There are many automakers who offer special deals. You can get benefit from the automaker's different sale events in which they will offer zero annual percentage rates for buying their vehicle.
Used Car Loans
As there are many pros for opting new car loans, there are many advantages of having a used car loan. The prices having lower average is the common attraction point. You will get nearly new and good condition used car loans available through different sources mentioned above. There are the following benefits for choosing used auto loans.
- Shorter Loan Period
The used automobiles have high annual percentage rates (APR). You will get short loan period because of the cost of the vehicle.
- Depreciation Savings
The next benefit of selecting used auto loan is that if you miss out the chance to avail special rates on the new car on any sale event. Then you can save few bucks choosing a vehicle which had already taken its depreciation hit.