There are a lot of perks to owning a new car. The vehicle is often covered by a warranty for the first few years of ownership, meaning some hiccups and repairs are covered by the manufacturer. There is no wear and tear on the vehicle, which means no hidden problems waiting to emerge.
But unfortunately, new cars are expensive. Even with cheaper makes and models, you’ll be hard-pressed to find anything on the market for less than $14,000. That’s not an out-of-pocket expense many people can make. This is why auto loans are so popular. But before you sign up, there are some things to consider.
Weigh Your Options
Another avenue is to lease a vehicle. The monthly payments tend to be less than a loan. However, leasing is very literally just borrowing. This means that the dealership will sometimes cover the cost of minor repairs associated with wear, but you have to keep the vehicle in tip-top shape, and at the end of your lease period the vehicle goes back to the dealership. You may then be able to buy it, but you might also be penalized for a scuff or scratch they feel decreases the value.
Know When To Settle
Instead of a new car, it might be more in line with your budget to get one that is “new to you.” This can be just as novel an experience and just as beneficial. If a car was leased by the dealership, it was guaranteed to have been driven with a lot of care and consideration, and without an exorbitant amount of miles put onto it. There may be some wear, but the dealership will have a solid grasp of the car’s history, minimizing surprises.
A previously leased or similarly well-cared-for vehicle may have a reduced price, but still not be something you can pay for entirely out of pocket. If your credit isn’t the greatest and you were turned down for a loan from local lenders, you may want to look into online services. MaxLend loans, for example, have rather easy to meet requirements, such as being legally an adult and having a verifiable source of income.
Most dealerships “know a guy,” or institution, and refer their customers to them to acquire financing. Using their referral is quick, it can be relatively easy, but it’s not always the best deal.
Factors such as your credit history and length of the repayment period can affect loan interest, but not all lenders will have the same rates. Before you even start searching for dealerships, you should be doing some leg work to find a loan with terms you’re happy with. If you don’t have time to shop around, you can go to sites like MaxLend login and have your loan approved in as little as a day, ensuring you can get back on the road sooner.
Getting approved for a loan first also helps be more mindful about budgeting, making it less likely you’ll get talked into a more expensive purchase you really don’t need.
Keep in mind your limitations and let them inform your decisions. This way you end up with something that perfectly fits your life and needs.