Measures to the right car loan for your dream car
So after a thorough study and test-driving of the models available on the market, you've finally zeroed in on your dream vehicle. Are your woes done at last? Hardly so. Especially if you're considering a car loan for your purchase. Having a car loan might seem easy at first glance. Yeah, it definitely is but having the best deal on your car loan takes as much negotiation experience as you need to drive a car on slippery ground. Here are six golden tips that will help you get your car loan at the best prices.
Stay Away from Pre Approved Car Loans
If you are dreaming of grabbing your friendly car dealer's enticing car loan bid, it's time to say a polite ‘thank you' and carry on. Typically, auto dealers send their customers car loans and the consumers pick up the opportunity to save time and the endless trips to a bank branch. There is no free meal, as with all corporate deals.
Car dealers are lobbying for car loans as they get commissions depending on the number of loans they can deliver to their customers. Car loan service companies have connections with car dealers and the dealer can also provide certain incentives on car parts to consumers who pay for car loans.
Now, auto accessories or other deals have a one-time advantage, while Car loan interest rate is taken higher, virtually runs for the full length of the loan, toiling your wallet per year in the process. It is better to stop any car loan offered by your car dealer as a general rule and spend any time finding an independent contractor.
Choose your Car Model Wisely
It is your personal preference to pick the car type, so it may come as a surprise to know that your choice is intricately related to your car loan decision. Not many people know that interest rates on car loans vary with different car types, even though the loan is taken by the same bank or Non-Banking Finance Firm like TATA Capital Car Loan. The age and section of the car have a major role to play in assessing the interest rate on the vehicle loan.
Interest rates are a little higher for less popular or discontinued models than those in the popular and luxury segments. Therefore, make it a point to carefully pick your car make and model, since a wrong car option will mean that you end up paying a higher car loan to increase the average cost of purchasing your car.
Prefer Public Sector Banks over Private Banks
Public sector banks enjoy the dubious distinction of being late for customer support, but opting for a car loan with a public sector bank can sometimes save you money over the long term. Public sector banks have assigned due importance to develop their work culture as competition grows. So the next time you deal with all of them, you might be in for a nice surprise.
If you're looking for a fixed or floating interest rate, opting for a public sector bank car loan will mean a comparatively cheaper interest rate or even a reasonable one compared to private banks. Moreover, several banks frequently provide reduced interest rates for different ‘car loan dinners' during the year in both urban and semi-urban centers.
Consider a Higher Down Payment
A cheaper car loan would not go hand and hand with a minimum down payment. Settling with a minimum down cost might get you a car loan, but in the long term, it is not good for you. Paying a higher down payment instead of the required sum, on the other hand, means that the average amount of the debt is smaller, resulting in lower annual interest payments and a lowered EMI.
Pick Car Loan Provider after active compare
Stop taking a car loan without assessing the options first and comparing them. Various comparison apps for online car loans help you compare car loans in a jiffy. Since most car loan borrowers pay their debts well in advance, it is only natural that you know the foreclosure fees for different suppliers of car loan services and compare the characteristics for each before choosing the appropriate offer.
