Finance your car, bank loan or dealer?
In 2016, vehicle purchases have skyrocketed, car registrations have grown according to the Traffic Department.
Although the car purchase data s has been lower in 2016 than in 2015, perhaps due to the economic uncertainty that we are experiencing due to the lack of government after the repetition of elections.
In any case, most companies and individuals use financing to buy a vehicle, be it a car or an industrial vehicle. But the big question is, how is it better to finance the purchase of a car, with a bank loan or with the financing of the concessionaire?
Whatever the important thing is to have some savings to give the entry to purchase the vehicle, normally it is necessary an amount of money between 10% and 25% of the total price of the vehicle, including taxes (VAT, road tax, etc).
When it comes to financing your car, you have to bear in mind that, whether with bank loans or concessionary financing, we will have to pay study or opening fees.
Advantages and disadvantages of financing the purchase of a vehicle with the dealer
In the end many companies and individuals resort to financing the dealer because it is easy to get, fast, and above all comfortable. Because the same seller of the vehicle offers us an auto credit, and even a car insurance, either full-risk or mandatory with moons and roadside assistance.
But for the dealership credit to be attractive it is not just a matter of the seller offering or being skillful, but the interest rate must be equal to or lower than the bank’s auto loan. Many dealers have some of the best auto loans in the market, and that is why they get the individual or company to decide for them instead of a bank.
But undoubtedly one of the great advantages of financing the purchase of a vehicle with the dealer is the entrance. Because if you buy a new car you can give your used vehicle as payment in kind for part of the price.
So you do not need money to give the ticket, but simply deliver the keys of your second-hand car. No doubt a facility that does not offer a bank and therefore in case of not using the financing of the dealer, we would have to include as a greater amount of money of the auto loan that we are going to request from the bank.
However, financing the purchase of a car with the dealer also has its disadvantages, basically we mean that we do not compare the conditions of the auto credit. What can do that by precipitation and convenience we have not resorted to a comparison of online auto loans such as Credit SMS.
That even from your mobile phone you can see what conditions there are for car loans in the market. In other cases it is not a problem of the conditions, either interest rate or commissions, but of having to also contract the insurance with the same dealer.
And as with bank loans, the hiring of linked products can generate higher costs in the credit operation. In addition, sometimes the vehicle loan from the dealer requires an amount of money to be financed higher than the one the bank would request in its car loan.
So having more financing can make us end up buying a high-end car, which we do not need, simply because they give us the financing. Which in the long run will mean higher maintenance costs and higher interest payments in monthly installments.
For this reason and in case of any doubt, it is best to resort to a simulation through our credit comparison. It will take you a few minutes and you can do it even from your mobile phone in the same dealer. But this way you will know if the financing offered to you to buy the vehicle is the best you can get given your personal situation and the amount of money requested.