What kind of car loan do you need?
Tuesday April 8, 2008
Car loan providers can offer you many extra facilities on your loan that can make it more flexible, but also cost more than a bare bones loan would. Depending on the kind of car you are buying, you will need a different car loan with different features. What follows are some considerations to make about your loan depending on your reasons for buying your new car.
For those who merely need a car for transport, and are looking to buy the cheapest, most efficient car available, you will probably want a no frills car loan that provides no bonus facilities but offers the lowest interest rate and fewest fees. This puts you into the least amount of debt and will hopefully ensure your ability to pay off the loan.
Hobbyist car restoration enthusiasts will probably want a car loan that provides them with a redraw facility. This allows as much money to be put into repaying the loan as possible, but also means funds can be reclaimed in case of overenthusiastic payment. Certain insurance options may also be available and desirable for such borrowers.
Those who want to buy a luxury car as a status symbol will probably benefit from no frills or a loan with redraw facility, depending on the individual's financial means. Another option could be car rental, which reduces the hassle of repairs and keeps the driver in the most modern cars for fairly minimal expense.
