At some point in life we all find it difficult to steer through the world of credit. If we have too little, we can get declined for loans and mortgages on the foundation that we are not able to provide any financial responsibility; however, if we have too much we can get punished for been unable to live within our means. Of course, the world of credit allows us to buy the things we have always dreamed of like a home, car or maybe a well deserved holiday.
In other words, sometimes credit can be a useful instrument or a great way to annihilate your finances.
If you are looking to get a car loan then rules are no different. Lenders will always take a positive view of you if you’re able to show a responsible repayment track record. On the other hand, you should only take out car finance under very specific circumstance, and if any of these conditions apply to you, think twice about financing car!
You Have A Poor Credit Score. Are you willing to pay thousands of dollars in interest alone simply because you had a few missed payments in the past? Probably not. This is why you should save up for your next car purchase instead of financing the total cost. If you need a car within the next few weeks and can’t possibly save up the money in time, then make sure you pay off that loan as quickly as possible - otherwise, you’re better off flushing your money down the toilet.
It’s a Banger. Garage dealerships are well known for pushing cheap financing agreements onto otherwise unaware customers. Why you ask? The answer is quite simple: aging cars often break down faster, but you are still required to repay the loan even if the car is currently off the road. Ask yourself this question: Do you really want to be paying for two car loans for the price of one car? Do yourself a good turn and steer away from a car that’s more than 3 years old, especially if the term of the credit agreement is longer than two years.
SUV’s are safer. Although it’s a well known fact that SUVs show off a good safety record, they are rapidly going out of fashion. Let’s face it, they’re BIG, noisy and not easy on the wallet either! Whatever you do don’t finance an SUV!. You’ll be paying more in interest for the foreseeable future than what the vehicle would be worth in a year or two.
The Automaker Is Going Under. Yes, the dealers of failing automakers are absolutely desperate to sell their cars - however, you need to be careful of financing these cars, since your warranty is not guaranteed. This means that should you get into an accident, you’ll have to pay thousands out of pocket for repairs, or buy a new car altogether. Again, the option of paying off two loans for the price of one is not too appealing - so don’t do it!
Accordingly, do the right thing by saving for a car that is within your budget, and avoid financing a car within the current climate - your bank balance will be better off for it.
Tags: auto finance, auto loans, bad credit loans, car finance, Car loans, Finance, loans for bad credit, Personal loans