Auto loan new car
A car is a status symbol. Anywhere you travel all over the globe from India to the United States or from Australia to China a car is something unique. People will turn their head when they see a C-class or Rolls. A car is also a utility item which has replaced the old horse drawn car riage. Production figures of cars are on the rise and have been rising year after year. Earlier countries like India which produced only about 48 000 cars in a year have jumped to figure of 4 to 5 hundred thousand.
The car manufactured has to be sold that is the axiom. But the last two years there is a recession and the auto industry is no exception. Closure of the Opel plant in Germany to the bankruptcy of the General Motors in the USA coupled with a first ever loss by Toyota in 2009 the picture may look bleak. But manufacturers are still churning out car s. These car s have to be sold.
Sale of car s is the life blood of the auto plants. In case their car s are not sold there is every chance that over a period of time the auto plants will have to curtail production or shut down. Hence sale of car s assumes paramount importance. As part of the momentum to keep new car sales car ry on the financial companies in conjunction with the car dealers have a variety of loan options. These are only for new car s that are driven out of the showrooms.
IN the United States research has shown that a majority of the car s sold from the show rooms are financed with a term loan. This is also true for Europe as well as the developing countries like Pakistan and Africa.
One reason is as I have pointed out is to cut inventory losses and second important reason is the price of car s. The car s price has gone up and making a down payment in full is sometimes out of the capability of the buyer. Thus we have the finance option where in a man with a lesser income can opt for a higher priced car , as his down payment is minimal and the balance is paid in monthly installments. The rates of interest and other terms offered are not uniform and a lot depends on your credit report. The credit report and the credit rating will be the guide to the interest charged. Higher the credit score and lower the interest charged. So it is in the interest of prospective car buyers to try and keep their credit score as high as possible.
When you opt to buy a new car the rate of interest that you will be charged assumes great importance. It\'s worthwhile to know that the national average for auto loans is 6.08% and could go down to 3.49 % and a high of 10.49%.keep these in mind when you opt for a loan.
Earlier the conventional loan was for 36 months. But with rise in car prices car dealers are offering loans for periods ranging from 60 to 84 months. These have a positive and negative side. The negative side is that auto loan lingers along for 7 years and the car depreciates all along. So at a later stage the value of the car could be less than the outstanding loan. The positive side is that your installments are low and you can well afford a higher priced car.
As things stand whatever the price of the car it can be made available to you through an auto loan. You can buy new car model or make that appeals to you, which in the normal run you would not have bought. car loans for new models are available under two heads-Secured and unsecured. Secured car loans have collateral as security the car itself or some other tangible asset like a house. The collateral is the security for the loan and in case of default can be used by the loan giver. In such cases the entire amount of the car can be availed as a loan. Another big advantage is that secured car loans car ry a lower rate of interest. In this case as the risk of the lender is reduced the loan also can be given for a longer period. It is not uncommon to have such loans for periods up to 84 months. The second option is of an unsecured car loan. Such loans car ry a higher rate of interest. Unsecured car loans basically are for people who cannot show any asset and have nothing to show as collateral. These people can also be sanctioned loans.All they have to show is that they have a stable job and a regular source of income like salary.
The car loan market faces a cut throat competition. The number of dealers offering loans for new car s is a legion. So it will be in your interest to car ry out a comparative evaluation before deciding which offer to take. One of the best methods is to car ry out a survey on the net. This is a great source of information and all major dealers and loan givers have their sites which can be accessed. You can then make a comparison.Composite sites are also available that at the click of a mouse will open many sites and you can compare the rates in a tabular form.
Getting a car loan for a new auto is no big deal these days. It\'s a consumers market. With production figure ranging at about 70 million car s per annum the field is open and exciting.
Once you have availed an auto loan for your new car make it a point to pay the installments on time.Also insure that the loan taken is payable within your source of income.