If you’re torn between getting car financing from the dealership or taking out personal loans, this article is for you.
A car is a depreciating asset; a rapidly depreciating one, to be exact.
It means that you are paying for an asset which may already lose its value when you finally paid it off. With around 15% depreciation rate on the first 12 months, and 20% depreciation on the succeeding years due to wear and tear; you are investing more money on something which is declining in value. The interests you paid overtime will be considered as an overall loss when the time comes for you to sell it.
The reason is simple. If you will finance the purchase of a car for three to five years, you will have to pay the same amount you and your car dealer agreed upon, while your car is getting old.
Many car buyers opt for car financing on dealership and they usually negotiate on long-term payment to make the payments affordable. But, in reality, repaying it for a long period of time also means taking on the additional interests and late fees, in case you missed payments. That’s actually paying more than what you actually bargained for.
A personal loan is cheaper than car financing on dealership.
Car financing, especially when there’s an auto dealer behind it is a high pressure loan, and possibly full of push on add-ons. All the more if the company is after their big sale promo.
The car dealer’s deal can rip off your finances and you may find yourself over a barrel. Car financing is usually front-loaded with interests. Aside from the deposit where the sales dealer gets a cut, you may be paying for more interest in the beginning of the loan. That means, even if you decide to repay your loan early, you may still have to pay for the same rate.
The car is yours to own and to sell if you want; even if you have not yet paid your personal loan in full.
If you missed several payments, you may lose your car to repossession. Aside from the fact that you have to bear with the lack of transportation, as its immediate impact, it can be difficult to get another car loan as well. Potential lenders also frown upon borrowers with a record of failure to pay their auto loan in the credit report. Not having transportation plus the fact that you are in a financial turmoil can also cause a lot of stress.
On the other hand, getting a personal loan would spare you from these consequences. Personal loans are flexible. To top it all, you don’t have to worry about car repossession. If you are unable to pay off your personal loan, your car is still safe.
NSW Mortgage Corp offers quick approval personal loans that you can use for vehicle financing, debt payment, and any purpose. You can get it within 24 hours because of its quick availability feature. We also require minimum documentation. So, even if you have no financial documents, contact us and we will surely work things out. Learn more about NSW Mortgage Corp’s personal loans. Contact us now!