Purchasing a new vehicle can be a huge financial decision, so you will want to ensure that you have everything in order before you sign on the dotted line. In particular, you will want to make sure that you have secured the best financing possible for your purchase. However, since there are so many financing options available these days, it can be a difficult decision in choosing the best one for you. As such, this article takes a look at the pros and cons of the various lender options that are available to you.
Chances are good that if you drive to the downtown area of your nearest city, you will come across the branches of a number of large national banks. With branches just about everywhere, they are a very popular option for customers seeking auto loans. However, while their branches are extremely convenient, their interest rates can often be significantly higher than a smaller, local financial institution.
You may have to look a little harder to find your local credit union than you would with a large bank, but once you find one you will see why their members love them so much. What they sometimes lack in convenience, they more than make up for in customer service and excellent rates. When dealing with a credit union, you can generally expect to receive rates around 1 or 2 percentage points lower than you will find with a major bank.
The vast majority of car dealerships will be more than happy to help you finance your new vehicle. While many customers enjoy being able to handle every aspect of the deal from the dealership, and not having to visit a bank or credit union, it may not be the best decision from a financial standpoint. You can generally expect interest rates received from a dealership to be a little higher than if you went to a bank directly. However, if you keep your eyes peeled you can often find promotions and incentives where dealers offer low or 0% financing on new vehicles. If you can find deals like these, they may be the way to go.
While there is no shortage of companies who will be willing to offer you financing for your new car, they are not all created equal. Be sure to shop around at as many places as possible to ensure that you can get the best deal possible.