January 16, 2018

Pros and Cons of Vehicle Financing

nowadays inflation has taken over the world by storm. prices are rapidly increasing every few months, and car prices are actually sky – rocketing every year. in such a tough economy, it is difficult for most people to buy an above average car and so they have started taking advantage of finance schemes. finding schemes are a good option and they have many pros, but they are also associated with some cons
which you should be aware of.

benefits

extra savings: when you choose to finance a vehicle instead of paying the entire amount by yourself, you can maintain your savings. these can later be used on anything such as vacations, education and home renovation. if something unplanned happens like an accident or a medical emergency, you can use these funds at that time.
good credit history: your dealer sends your monthly payments report to major bureaus in the country. if your payment are timely, your credit history is improved which raises your fico score. this is helpful if you want to avail financial help in the future such as such as installment loans, mortgage loans and credit cards.
better car make and model: if you plan to buy a car entirely on cash payments, then your selection is limited to vehicles which fall within that budget. you may have to opt for a second – hand car or a smaller car. however, availing car financing gives you flexibility in this regard and it becomes easier for you to purchase a new model and a bigger car.
insurance coverage: most of the finance schemes include insurance costs in their total package. insurance is valid for the entire leasing period without any regard to the number of years. you only have to give the down payment and monthly payments, which cover the insurance cost as well. if  you buy the car on your own, then you have to pay an additional amount for insurance other than the car price, and it would be applicable for only one year. for the next year, you will have to pay the amount again, and get it renewed.

drawbacks

interest rates: monthly payments are calculated using the interest rate. if you calculate the total value payable for the entire financing period, it will sum to much more than the total car price. this means you pay a huge amount to avail this facility.
depreciation costs: the total value of your vehicle is depreciated every year. it takes many years for the amount you spent and the vehicle’s resale value to break even. this is means you are stuck with the same car for all that period even if your needs have changed. if you sell the car before the due  time, you will suffer loss and will receive a lesser amount.
maintenance: vehicle financing schemes do not include any maintenance costs. this means you will  have to pay for all repairs in addition to your monthly payvehicle financingments.

please visit www.student-finance.com.au for more information on car loans and financial institutes. if you are interested, the organization will also refer you to other institutes which provide these services.

For more information, visit Vehicle Financing Tips.  Or you could also look at Vehicle Financing Options




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