How To Finance Your Dream Car

We all have some dream, whether it’s going on holiday to some exotic destination, meeting someone special, or buying something you really like. If your goal is to buy your dream car, then this article is just what you need to know how to finance your dream car. At the beginning of a goal, it’s easy to feel that the goal is too big, and too difficult to achieve, but if you focus on the process, rather than the goal, you will be able to attain your goal much more effectively than you think.


Lease a Car


Leasing a car is one of the easiest ways to get one. However, it can be more expensive than it should be if you do not understand the hidden costs and restrictions buried within the lease. You have to understand that the car company has a unique advantage in that whereas you will lease a car once every few years, perhaps even just once every 10 years or more, and out that lease under the same umbrella as your other routine current expenses, weighing your monthly payments against cash flows, your car leasor is in a different position. Part of their business is in leasing cars. They ensure that they plan their affairs for the long-term, writing conservative leases that maximize their return on invested capital. Getting a lawyer to look through your lease agreement may be a good idea in terms of checking the legality of a document, but it does not help you in terms of figuring out if a lease agreement is a good business deal.


So before taking up a “lease to own” option in an agreement, you need to consult an accountant and also, on your part, try and understand the lease agreement and its implications, hidden costs and restrictions.


Get a Credit Union Loan


A credit union is a great source of loans. Credit unions are not-for-profits that serve their members, who in a real sense are also part-owners of the credit owners. Credit unions accept deposits just like banks, issue loans and offer a large number of financial services. You can obtain a loan from your credit union and minimum interest rates.


Additionally, because members own the credit union, profits earned by the credit union are returned to the members by way of reduced fees, increased savings rates and lower loan rates. You can find a credit union near you and discover more about their policies and criteria for membership.


Credit unions also offer low-cost insurance, which will make it even easier to keep your costs low and manage your finances.


Get a Car Loan from the Bank


The most traditional source of financing for a car loan is the bank. To get a loan, you will need a good credit score and adequate income. These two factors will determine how much you can borrow and at what interest rate. Your credit score signals to the bank how risky a loan to you is, based on your credit history. The riskier you are, the higher your credit score, and the higher the interest rate you will have to pay. Your income determines your economic capacity to pay. Banks are regulated such that they can issue a loan that is a portion of your foreseeable disposable income. So your bank cannot give you a $100,000 loan if you have a monthly disposable income of $1000 and the loan has to be repaid in 3 years. On your part, you should always ensure that you spend a reasonable amount of your income on a car.


If you repay the loan on time, this will be a plus for your credit score, which will make it even easier to borrow in the future, because your credit score will look better and your interest rate will therefore come down.

You can also obtain instant car title loans, which are another great source of financing for your car loan. They are fast to obtain, over easy-to-use platforms and with easy to understand loan agreements.

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