Is it Wise to Borrow from a Car Dealer or from a Bank?

Overview:

Are you planning to buy a new car? Or wish to gift a four wheeler to your daughter on her graduation day? Yes! Then you must be looking out for financing options?

On visiting a dealer, you must have read offers like – “Lowest Rates Ever,” “0% Interest Rate.” So, the question here is – Are these offers real? The answer is – “Sometimes Yes” and “Most of the time NO.”

How does zero or low percent financing work?

It is a standard belief that if something sounds too good to be true then there is certainly something fishy in the same. However, at times it may be a genuine offer. Please consider the following –

  • Dealers and manufacturers come up with such exciting offers to sell models that are not moving fast in the market.
  • Grab a good amount of hold in the market.

What should one consider before opting for such financing options?

  • It is difficult to qualify for such low financing options. Only about 20% of the total applicants get an approval for such attractive options. One needs to have a good credit score and a good repayment history to get an approval.

Usually, the tenure for repayment is much shorter when compared to other financing options. Most car loans are offered for 4-5 years, but such glossy offers are limited to three years.

Updated: December 2, 2016 — 10:49 am

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