best car finance 2021, those who dream of having their own car, whether new or used, vehicle financing can be a alternative to make life easier for buyers who do not own the full value of the car.
What do I need to know before financing your vehicle?
In order for everything to go as expected in your vehicle financing, it is necessary to study the advantages and disadvantages of the different forms of financing. car loan
For example, the interest conditions, the final value of the vehicle and, above all, carry out a financial planning that is adequate to the buyer’s reality.
Let’s not forget that financing a vehicle is a long-term debt.
what is best car finance ?
Financing for the purchase of new or used cars can be made in three ways:
CDC (Direct Consumer Credit);
All these options have positive and negative points, so they must be carefully compared, so that the best choice is made according to the needs of each buyer.
Carry out best car finance through Direct Consumer Credit (CDC)
In Direct Consumer Credit (CDC) , the credit granted is carried out by a bank, that is, the vehicle is in the possession of the buyer, but cannot be negotiated until the end of payment of all installments.
In this case, all negotiation is done without the intermediary of the dealership that sold the vehicle.
The main advantage is that the interest rates are fixed at the beginning of the contract and do not change during the payment of the installments.
In this option, if the buyer does not pay the debt, the bank can file a lawsuit to keep the car, which is auctioned.
Also read: Do you know what assets can be pledged to pay off debts?
In this way, the amount is used to pay the amount that was missing and the legal expenses that the bank had and the amount that is left is returned to the consumer.
Do you want to best car finance? Meet Leasing
To finance vehicles with Leasing, the person who buys the car is called a leasing company (a bank that works with this type of service).
The car is rented for a longer period, usually for one or two years, with the option to purchase.
Also read: How to get best car finance?
In other words, the customer pays for the car rental , which is in the name of the leasing company until the end of the installments, when, without having to pay any more installments, the consumer becomes the owner of the car.
The advantage of this type of vehicle financing is similar to that of CDC, the interest rates are also fixed at the beginning of the contract and do not change during the payment of installments.
You can also make a consortium for your best car finance
In the Consortium , the logic is a little different.
Here, the consumer is part of a group formed by other buyers, organized by a consortium administrator.
In this case, the customer pays the installments but only receives the vehicle when it is drawn (once a month, one person is included).
There may be a variation in the value of the installments during the payment, according to the variation in the price of the car that will be purchased.
The advantage is that only an administration fee is charged here, referring to the service provided by the company.
10 tips for best car finance
To get your car right, we have listed 10 important tips on how to choose the best vehicle financing , especially for those who want to buy a used car:
Choose a model you want to buy and research the car’s prices and conditions. Popular cars tend to be easier to get financing because the debt acquired is less.
2) Interest Rates
Check the interest rates charged by the bank to make sure the installments are within your budget.
3) Financing time
Remember that the smaller the installments of your loan, the lower the interest charged by the bank.
4) Initial booking and best car finance
Having a reserve of at least 30% of the vehicle value, to serve as a down payment on the vehicle financing, will considerably decrease the value and time of payment of the installments.
However, in the case of a consortium, this amount can be used to place the bid.
5) No advance payment
Choose a car dealership partner of a financial institution. Never pay in advance and do not pay any kind of advance fee for credit approval.
6) Legal status
Check if the car’s documentation is up to date, if there are fines or other legal issues before closing the deal.
7) Evaluation of a professional
Before purchasing a used vehicle, ask your trusted mechanic for an analysis. It can detect small issues that were not visible to you.
8) Test drive
If possible, ask the seller to drive the vehicle around. When driving, you will see if the car pleases you and if it does not have any operating difficulties.
9) Vehicle costs
Write down all the expenses you will have for the car.
Remember that when you buy the car you will have to pay for the transfer documentation, in the zero kilometer license plate, property tax, licensing and other costs.
10) Secret of the last weekend of the month
End of month is the sales closing period, where all salespeople have tried to hit their targets. The chances of finding special offers and conditions are much higher.
Can I have my vehicle financing application denied?
Applying for a vehicle loan becomes simple if you have a good proven income and your name cleared in the credit record.
That is, the consumer cannot have the name negative and must have a high credit score .
Thus, these points give banks the security that the customer is able to pay the payment, facilitating the release of credit. detail
Therefore, it is very difficult for a person with a negative name to be approved when seeking car financing.