Has your car finally reached the point where it is difficult to keep it on the road? As cars get older, repair costs mount – particularly once they are out of warranty. Not only does this hit your pocketbook, but it often means that you are off the road for days – or have to rent a car while yours is in the shop. At this point, it’s often a good idea to cut your losses and get another car. In fact, sometimes the repair costs are so high – for example, when you have blown the transmission – that it’s just not worth trying to repair the car at all.
Of course, buying another car is an expensive business, so you will want to look at all the various financing options available to you to see what is the best deal. There are actually a few options available, and the one that you should choose really depends on your circumstances.
If you have the cash available, then it is often a good idea to pay for the car outright. However, before you do this, make sure that you are not going to need the money for anything else down the road, since it is not easy to get a loan for a car that you already own. Also, you should check around to see if there are any exceptional financing deals available – for example, 0% finance over a year, with the option to pay off the full amount at the end of the year. Although these types of deals are rare, they do crop up from time to time – and in the case just described, you essentially get use of your money for a year at no extra cost, so it’s a pretty easy decision to make. However, beware of thinking you are getting a good deal just because you are getting an interest rate of 3% or 4% – you would be surprised how much extra you end up forking out over the course of your repayments.
Assuming that you do need to go for financing and your credit is good, then you have two options – take out a car loan or lease your vehicle. If you get a car loan, you will typically have to come up with a deposit of around 20% up front – or you can offset the trade-in value of your existing vehicle against this. Obviously, if your car is on its last legs, then you will not be able to do this, but if it is in half decent shape then this is something to consider. On the other hand, if you go down the lease route, you will typically have to come up with much less money – or none at all – when you first get the car. This is because leasing a car is basically renting the car for a fixed period of time – for example, three years. Another advantage of leasing is that the monthly repayments tend to be smaller than you would have to make with a car loan. However, at the end of the lease, you won’t own the car – you have to return it to the dealer, or make an additional lump sum payment to purchase the vehicle.
If your credit isn’t good, there are still options available – such as this Kansas City Buy Here Pay Here dealership. They will consider working with you even if you don’t have a good credit score and have been rejected by other finance providers. You will still get a wide variety of cars to choose from, so you should be able to find a vehicle that suits the needs of you and your family.
You can get a free credit report from annualcreditreport.com, which is a site that is authorized by the federal government and supported by the main credit rating agencies in the US. This will show you if there are any problems with your credit – such as outstanding bills, defaults or legal judgments. However, if you really want to know the full details of how companies will interpret your financial history, then pay the extra fee – about $25 – and get your credit score. If this is above 600, then there is a good chance that you will be able to get a loan from a bank or from a regular car dealer. Otherwise, you should look for a provider willing to work with those with bad credit. In fact, meeting your repayment schedule on your car is a great way to rebuild your credit score.