Knowing Your Options For Financing A Vehicle

Unless you have been saving up for a while or you came into some pretty big money, chances are you will need to get a loan in order to purchase a vehicle. If you are heading to the car lot to purchase a vehicle and will need financing, it is important to weigh out all your options when it comes to how you are going to pay for it. Getting preapproved for your auto loan will help you when it comes to the financing portion of buying a vehicle. There are two main types of financing options, direct lending or dealership financing. Both of these can be a great way to afford a vehicle when you don't have the full amount of money available. Before choosing one of these options, you need to know what all is involved in the process. 

Dealer Financing

Getting your loan through a dealer is much more convenient since you are already heading there to shop for vehicles. On top of that, when you choose to get financing through the dealership, you have many more options available to you. Dealerships will establish relationships with several different banks and financing companies.Dealerships also have more flexible hours than banks do. A lot of banks will only be open on the weekdays, which can be difficult for those who work during these hours. Dealerships can be open at night and weekends in order to serve more customers. 

Dealerships will often advertise special rates and rebates available to customers {like buy here pay here}. In some cases, you must first get approved for these special rates. It is always a good idea to ask about any special promotions as it could end up saving you money on your purchase. Some dealerships will also match competitor's pricing. If you find a cheaper rate at one dealership, you should mention it to see if they can match it. 

Direct Lending

Direct lending can also have many benefits if you are looking to purchase a vehicle. When you choose direct lending, you will head to the bank or financing company before purchasing the vehicle. Not only does this allow you to get preapproved, but it also provides you the terms of the loan ahead of time. This can help relieve some anxiety before heading to the dealership to shop for vehicles. You can also do your shopping for loans ahead of time so you know exactly what you will be paying. You have the luxury of shopping different lenders of your choice in order to get the best rate available.