Are you looking for an affordable car loan?

When it comes to getting finance for payment on a vehicle there are a number of options available to consumers these days based on their credit history and rating.

The two most popular methods of financing a car are taking out a loan from the bank for the purchase of a car or applying for finance direct from the dealership in order to purchase a vehicle. For those with bad credit the latter is sometimes the only option, as many banks won’t lend to those with poor credit whereas there are some specialist companies that will allow bad credit consumers to purchase a car from them on finance.

However, according to recent reports the cost of taking out finance through a car dealership could end up being way higher than taking out a car loan from your bank, and consumers should think very carefully before rushing in to take out finance from a dealership, taking the time to compare other options and see which actually offers the best value for money.

With the new 2007 models ready to hit the showrooms at the end of March, many people could feel pressured into taking on car finance from a dealership in a bid to get the vehicle that they want, and this could cost them a small fortune in some cases.

A Uswitch official stated: 'A rushed decision or just taking the finance deal offered by the car dealer could turn out to be a long term financial burden. The average interest rate for a car showroom finance deal is 10.12% APR, which is 4.22% APR higher than the best loan rates available and nearly double the current Bank of England base rate.'

Anyone planning to look into the purchase of a new car – or even a used car – is advised to check out the interest rates and terms on loans from traditional lenders before sighing up to dealership finance in order to see whether they could save money on their borrowing.

Tom Smith
10.04.07

More Information:

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Car loan rates in US vary between lending agencies and firms, with practically, each one of these lenders promising the lowest APR available in the market.
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Owning a car is a necessity in today’s fast-moving world, but to purchase it you should understand that sometimes your savings may not cover its costs.

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