Understanding How the Adelaide Car Loan Market Operates
Aside from your home, a car is arguably one of the next biggest single purchases you are likely to make. If you have ready cash, you can pay for your car upfront and hence no need to engage financiers and credit institutions. On the other hand, if you don’t have the finances for a spot purchase, getting a car loan is the next best option. Because of the long term commitment that comes with car loans, you must not allow the thrill of owning a car affect your decision making process.
How Car Loans in Adelaide Work
Whether you are buying a new or used car, the car loan is treated as a personal loan which is payable within a certain duration of time which could be anywhere between 12 months and 5 years. Before the financing can be concluded, you have to sign a credit contract which stipulates the amount borrowed and the mode of repayment.
You can either opt for a variable rate or fixed rate car loan. A fixed rate is where the interest is locked for the duration of the loan while the variable rate is where the interest rate fluctuates up or down in the course of the life of the loan. While fixed rate loans tend to offer the benefit of predetermined repayments, in the event you make extra payments so as to clear the loan early, you may be penalised for early termination but not at Rent 2 Own Cars
Choosing Your Car Loan in Adelaide
There are basically two main types of car loans you can opt for; secured loan and unsecured loan. The secured loan is where you offer an asset to be used as collateral or security for the loan. If the asset you offer is the car you are buying, this is called asset financing. The advantage with secured loans is that they give you the benefit of lower interest rates. That being said, you need to watch out because if you fail in honoring your repayments, the credit provider can repossess and sell the collateral.
On the other hand, unsecured loan doesn’t require you to put any asset as security. These loans are generally harder to get because you must convince the credit providers that your financial position and credit worthiness are sound enough. Failure to pay this loan may see you taken to court or your property auctioned to recover the money.
Shopping for the Best Car Loan Deal
When shopping for a car loan in Adelaide, your aim should be on getting the best credit deal irrespective of your credit status. If you have bad credit, you may have to start by analyzing your credit reports so as to understand the extent of your credit status. This will safeguard you against car dealers who may want to take advantage of your bad credit to give you a raw deal.
Having your records straight including any regular payments you have been making and utility records can give you bargaining power in terms of competitively priced loans. Always check the terms and conditions to ensure that all that is included is something you agree with before appending your signature. Talk to Rent 2 Own Cars at Edwardstown, Adelaide to get a car payment plan that suits your budget.