Advantages and disadvantages of financing the purchase of a car

One of the key decisions when facing the purchase of a new car is whether or not to finance the vehicle, for this one should know its advantages and disadvantages

Financing the purchase of a car, that is the dilemma.  There are many potential vehicle buyers who fall into this doubt when they want to buy a dealership car.  And sometimes, salespeople more than help solve the question, they seek to take advantage of it. It may seem counterintuitive.  But the main stakeholders in financing the purchase of a car are the dealers themselves and the automotive companies.

It would be logical to think that they would be rather pleased that all their customers pay the full amount without delay.  But in many cases, reality seems to show otherwise. The volume of sales has increased, once the selling companies themselves began to offer their own credit plans.  In addition, thanks to some of the strategies used, clients end up paying a higher amount than originally agreed.

The total amount, as one can see, can be substantially increased, derived from commissions, interests or additional services acquired.

The advantages

The main and for many onlyadvantage of financing at the purchase of a car is that it is not necessary to have the entire value of the property at the time of purchase.  Although this advantage may be interfered with by other conditions, such as the payment of interest.

Advantages of financing the purchase of the car directly with the dealer

For those who have decided to purchase a car on credit, having the options offered by dealerships can represent an important benefit.  Unlike what happens with most banks and other financial institutions, the procedures are much faster and easier.

Risk analysts in the field of car sales, handle much more flexible criteria when

approving applications.  Clients with not totally clean credit history, without any possibility of receiving loans from a bank, are served in this way.

Additionally, many companies dedicated to the sale of vehicles accept a used car as part of payment.  This route is still a practical solution for those who do not have much budget.

The disadvantages of the advantages

If you have the liquidity and financial strength to take on the cash investment, financing a car purchase shouldn’t even be an option.  Many of the ‘advantages’ offered at the time of agreeing to purchase a car in installments, end up far from adding benefits to buyers:

Dealers offer discounts of up to few thousands for financing the purchase.  But at the end of the process, the client ends up paying only in interest, not only the discount itself, but much more.

A much-mentioned advantage is the option to enjoy after-sales services.  Although no seller will directly admit that this will have a cost, unless the buyer requires a proposal in writing. The truth is that, within each monthly installment, extraordinary expenses are contemplated, such as the routine maintenance of the vehicle.

News Reporter

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