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Automobile Loans
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Automobile loans: Theoretically speaking an automobile is something more than an engine on four wheels. As a matter of fact it is more than just another mode of transport. In simple terms an automobile is the reflection of the personality and tastes of its owner. If experts are to be believed a person who owns a Rolls Royce is probably a person who gives top priority to quality and class. On the other hand a person who owns a sleek and trendy sports car is probably an aggressive person who likes the looks along with the stuff. There is no hiding the fact that an automobile is an indicator of your status and financial wealth. However, it is worthwhile remembering that automobiles do not come cheap. This is especially the case if at all you intend to pay for your dream automobile from your own pocket, you will have to earn a lot of money before you actually own the car.
Since there is no denying that it will take a lot of time for people to accumulate enough money to finance their car at one go, the facility of auto loans is offered to the public. In an ideal scenario auto loans can be obtained directly from financial institutions that are in the business of accepting deposits and offering loans. Fact remained that for the sake of convenience of the customer, almost all the car dealers provide the facility of auto loans.
It is worth mentioning in this regard that in the case of the former, the provider of the loan is not associated with the seller of the automobile. Furthermore always remember that the two transactions of purchase of automobile and obtaining the loan for purchase of the automobile are separate. On the other side of the coin in the latter instance, the financial institution and the car dealer enter in to a mutually beneficial agreement to provide finance for purchase of automobiles.
If experts are to be believed such an agreement is beneficial to all the parties concerned. In
an ideal scenario the customer gains as he or she gets can purchase the automobile and obtain an auto loan to finance the purchase at the same place. Point to be noted in this regard is that cumbersome paperwork and multiple negotiations can be avoided. It is worthwhile remembering that the car dealer gains by the fact that customers prefer a car dealer who provides the facility of auto loans to a car dealer who does not do so. On the other hand the lending institution gains by the fact that it is assured of borrowers. As a matter of fact this agreement enables it to shift the burden of advertising and marketing upon the car dealer.
In simple terms getting an auto loan from a lending institution will be cheaper for the borrower. However fact remained that the borrower will have to take up the burden of finding a lender offering the favorable terms and conditions that he or she is looking for. Believe it or not opting for auto loans offered by car dealers enables the borrower to get a tailor made deal suited to his or her needs. However, always remember that opting for an auto loan through a car dealer will be costlier due to the presence of the middleman.
More often than not an auto loan is pretty similar to any other loan. Fact remained that money is borrowed and repaid in installments along with interest charges. It is worth noting that apart from auto loans, there is a flourishing market for refinancing of auto loans and auto loans for borrowers having bad credit. According to experts choosing the wrong auto loan and you might drastically increase the chances of defaulting and losing your car. Thats why it is quite pivotal that you find out step-by-step how to avoid a money pit.
In an ideal scenario car loans are certainly less costly than home mortgages, student loans, or other kinds of loans. So the question now arises: Why do many people usually end up losing and defaulting their cars It is quite pivotal to find out these hidden dangers:
Biggest Hidden Car Loan Danger: First and foremost its the Inherent Money Pit
As compared to home mortgages, student loans or other big-ticket loans, car loans are inherently money pits. Fact of the matter is a house can build equity; higher education can increase earning potential; even jewelry can sometimes be re-sold for as much as was paid for it. If you borrow to buy one of those things, you may eventually get a return on investment. But fact remained that every single car loses significant value and keeps losing it as time goes by.
The main solution is to spend as little on your car as possible:
Of course, always remember that in order to spend as little as possible over the life of the vehicle, you need to get a well-made, fuel-efficient car, rather than the one with the lowest price on the windshield.
But in simple terms a pickup truck, SUV, sports car, or luxury model is a guaranteed money-loser. It is quite mandatory that you dont worry about what other people will think. The question now arises: What is the best buy Theoretically speaking many economists actually recommend buying a used car that's a year or two old. By following this route you can actually benefit from the fact that cars only drop in value. On the other hand even a car thats just six months old may offer you a substantial savings. It is necessary that you just have it inspected thoroughly so you don't lose what you've saved on maintenance payments. Moreover there is also hidden Car Loans Danger, which includes Dangerously High Monthly Payments.
Unfortunately, it is worth pointing that most people never figure out the total cost before signing on the dotted line. As a matter of fact they end up staying up late at night trying to figure out how to make ends meet. Other
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