Car loans make sense for some people, and not others. To decide whether a car loan makes sense for you, consider the following: Do you want your car to sit in your driveway collecting dust? Do you have interest in owning a car, but no interest in paying for it? If you answered yes to either of these questions, then it is possible you should consider an automobile loan. If getting a car loan is out of reach, then perhaps you could consider car detailing as another alternative for a more affordable and economical option.
There are some things you should first consider asking yourself before purchasing that brand new car.
1. Do you have bad credit?
When you do not have the best credit, it can make it difficult getting loans for big ticket items such as a car or home. So, are you curious as to what the interest rates are on car loans and how you can qualify for one?
Bad credit can be a serious handicap to finding a good used car, home, or business loan. It's hard to get the money you need without a good credit score, especially if you come from a low-income background. But how do you get good credit? If you have bad credit, it can take a lot of time and money to figure out how to improve it.
2. Are you in debt?
If so, you may consider putting this on hold unless having a car will open more opportunities for you to earn more income. If it is revenue-generating, then yes, if not, you may reconsider other options or transport options.
3. Can you afford it?
The car loan industry is notorious for its high interest rates, some of which are well into the double digits. It’s no wonder, then, that most car buyers go into debt to buy a car from a dealer, and then they have to pay the debt off at a high interest rate over the life of the loan. It’s also no wonder that so many people who would like to buy a car are too afraid to take the plunge.
4. How much do you really need?
This will often depend on what is the reason for your car. If you are just traveling to and from work, perhaps you could get by with any old car. But, if you are working in the trade as a construction worker, plumber, or electrician, then a Ute/truck/van/wagon or utility vehicle may be a better option as it grants you enough space to fit your tools. They are more pragmatic and therefore a better option. You could not possibly take any shortcuts on your vehicle within these given industries. Find out your purpose for transport then reverse engineer to find out what car you really need and if it is within your means of affordability.
5. How to get a low interest car loan
Find a great deal with the local car dealership or use comparing platforms like finder.com.au to source one.
Another great alternative is to purchase an older vehicle and have a pre-sale car detailing session to spruce it up so that it feels like a new car.