carlemonlaw's Blog

Do not have enough cash for that?

Do you have confusion about getting loans, since it is used car?

Do not worry! Arranging finance for used car is also possible. Yes, with a used car loan, you can buy used car easily.

As the name refers, a used car loan is offered to those borrowers who want to buy used car. Any type of cars can be financed with this loan. In this context, it is necessary to mention that a used car loan is available for those cars that are not more than 5 year old. As a used car loan, a borrower can borrow the equal amount of the cars. This loan is mainly offered for 2-5 years.

A used car loan is available both in a secured as well as in an unsecured form. If you want to avail this loan in a secured way, you have to place a security against the lending amount. As a security, you can use the car that you are about to purchase. Or some other valuable objects, like, home, real estate, jewelry can be used. Since, this loan is secured on borrowers’ property; hence the interest rate of this loan is lower. But at the same time, borrowers should keep in their mind that if the amount is not repaid, there property would be at risk.

On the other hand, unsecured option does not claim a security against a used car loan. Therefore, all types of tenants, like council tenants, MOD tenants, housing executives, PGs, living with parents etc can get their cars financed with this option. Since, this loan is not secured on borrowers’ property; hence the risk of collateral repossession is zero. But at the same time, the absence of collateral increases the risk of lending money, for which, lenders charge a higher interest rate. In that case, a bit shopping for a better deal can be advantageous for you.

A borrower, having a bad credit score also can buy used cars by availing a used car loan. It is applicable for all types of cases including country court judgment, IVAs, arrears, default, bankruptcy, skipping payments, late payments and so on. But in such cases, borrowers may have to pay a higher interest rate on a used car loan.

At last, borrowers are advised to check their repayment capacity before availing a used car loan. A judicious blend between borrowers’ repayment capacity and their borrowed amount will make them profitable.

Buying or leasing; this is a dilemma all people venturing to buy a car often faces. There is no steadfast rule stating which the better option is; however both have their share of advantages and disadvantages which have be considered before making the final decision.

The capital cost is one of the factors for choosing between leasing and buying. People who don’t have the capital to buy a car should consider leasing where you will only have to pay reasonable monthly installments. However if you can afford it, then you could consider buying a car either through an outright purchase or through a hire purchase scheme.

Though the hire purchase idea seems a good option, it is rather expensive as finance agreements are made here that have high percentage interest rates ranging between 20 – 25%. With this agreement, you may end up paying much more than the value of the vehicle at the end of the term.

By leasing a car, you don’t actually own the car at the end of the agreement; however it does cover most motor related costs that won’t get covered by a finance agreement with a dealership.

Buying your car may seem attractive; however you may suffer from high depreciation costs in the first 2 years where 20% of the value may be wiped out. Leased vehicles also suffer from the same problem but instead of you feeling the brunt of it, it is the leasing company that gets affected when they work at selling the car at the end of the lease.

On buying a car, remember that you will have to pay other costs for maintaining the car like insurance, car taxes, repairs and costs of damage or theft. Leased cars too face the same problems but as the leasing company is the stronger party here, overall costs are lower and are covered by the lease terms. And if your car is off the road, the leasing company also offers you a courtesy car. This offer is not available if you buy a car.

You could consider leasing a car to be a form of extended test drive for 2-3 years within which time; you get a feel of the vehicle and decide whether you want to buy the car at the end of the lease. However if you buy a car, you are stuck with it even if you find out that the car is not right for you. You could sell the car, but you lose in the process.

Though leasing cars seem to have most benefits, the largest benefit lies with buying cars where you are the sole owner of the car, and don’t have to use the car following the terms stated in an agreement. And if your financial position changes, you are still the owner of the car. With a leased car, you will be bound with the terms stated in the agreement. Some leasing companies charge large penalties if you terminate or change the contract halfway through the lease period.

So on comparing the advantages and disadvantages of leasing and buying cars, you have to decide which option is better depending on your financial capabilities and if you want to be a ‘full-time’ or ‘part-time’ owner of the car.

Car purchase loan provides financial assistance to those willing to buy a car. It doesn’t matter that whether you go for used car or new car.

There are many lenders in the financial market who offers competitive rates. But in order to provide an element of ease in the process of applying, majority of the lenders provides a facility of applying a loan through online mode. It is possible that you might fear of providing all the information on the internet. But, there is no need to worry about the security of the information provided as almost all the websites uses such software which keeps the information confined to only the borrower and the lender.

Car purchase loan availed by keeping asset as collateral is termed as secured car purchase loan. The features of secured car purchase loan are as follows:

• Low interest rate

• Longer repayment period

• Risk on asset when defaults in repayments are made

And, the car purchase loan availed without placing any collateral is termed as unsecured car purchase loan. The features of unsecured car purchase loan are:

• It also carries low interest rate but they are comparatively higher than secured car purchase loan

• Shorter repayment period

• No risk on asset as no asset is involved.

In order to get competitive rates of car purchase loan, you should always try to make high down payment as this tends to reduce the subsequent finance amount. As a result of which the risk of the lender reduces and he offers low and competitive rates.

If you are a bad credit scorer then it is possible that you are asked to pay high rates in car purchase loan but still you can also avail car purchase loan on competitive rates. And, this is possible through co-signer. Co-signer is the person that gives assurance to the lender that he will meet the repayments if the borrower fails to do so. Availing loan through co-signer is just as taking advantage of good credit score of another person.

Car purchase loans are the one of the most initial loans in the financial market. But, still there is a need to find the most appropriate and suitable loan which matches with your needs. And, this is only possible through research.