For people who are unable to buy a new car through an upfront payment always go for car loans or car financing. This way they are able to drive a new car of their own choice and pay in installments. However like every deal there are pros and cons attached. This article helps to enlighten the potential buyers about the pros and cons of car financing.
– By spending a relatively small amount, the buyer is able to drive a brand new shiny car of choice.
– With good credit history you can get low interest rates on the monthly installments. This way you save more money
– As the car is taken from car financing you get to drive your car under warranty for longer periods. This insures safe driving and sense of security
– As the car is brand new so you don’t have to spend much on maintenance. A new car doesn’t need long hours in the garage as the parts are brand new and work on optimum performance.
– Through some of the financing clauses you can change your car after every three years. That means you will never drive an old car and would remain the center of attraction throughout your life.
– Through your negotiation skills and a good credit history to back you up, the high chances are that you will be in a position to get a very good deal. Through this way the cost might significantly drop and the whole image of an expensive deal will go down the drain.
– Technically you never own a car until the financing is complete. The financing is a process of almost five years and this can turn in to a nuisance for some. This is one of the biggest drawbacks of car financing.
– The condition of the car has to be looked after to ensure a good return in case you sell the car. Also in most of the car financing you are not allowed to sell the car. This means the car can never be your asset until you make all the installments and you cannot bank on raising some money by selling the car.
– Another con is that you have to pay a monthly installment for years. Nonpayment of installment can lead to grim results and at times the car is taken away. This monthly payment might also affect the monthly budget at the time of need.
– You have a cap on the maximum number of miles to be driven. This leads to confusion among the drivers and the lease car at times is just a trophy car that the owner takes out on special occasions.
– The car cannot be disposed on your own free will. Prior permission is required from the leasing company.
– In case you have to go out of the country the contract will not be cancelled. Either pay an expensive fine or keep on paying the monthly installment
– The financing can be very expensive if the credit score is not par excellence.
These are just some of the pros and cons of car financing. The final decision is up to you. Whether to buy or skip is a matter of rational decision.