Tuesday, October 21, 2008

Car Loans – Opting for Car Loans instead of Purchase

The world is a busy place and modern day people are becoming busier due to the numerous tasks that they have to do throughout the day and saving time while traveling is essential to plan for a busy schedule. Millions of people travel from home to work and back, shopping, dropping and picking up kids to and from school, meeting friends, visiting the doctor, etc. Saving time in traveling has become very important, as people want more free time for themselves and their families. This is where the automobile comes in handy. Buying a car or a second car for the family’s needs is not always economically possible or feasible with, especially with fixed-income employees or small businessmen and traders. This is where Car Loans become a necessacity and come in handy.

A few decades ago, an automobile was a luxury and only the rich and well of could afford to buy a new car. As demand increased, and automobile companies made profits, they increased production and reduced the prices, making the Cars cheaper, easier to acquire, and within reach of the common man. But many still could not afford to pay the price for a Car in one down payment. Many Car manufacturing companies, Banks, and private finance companies came forward to provide Car Loans to people who still could not afford to buy Cars with a full payment for the purchase price. Easy availability of Car Loans was also useful in luring employed professionals working on a fixed salary, self-employed people, small businessmen, and traders, and many people who were hesitant in investing a big sum in purchasing a car.

In the present day, most families in the western world need at least one car for the family and if the family’s savings are not enough to buy a car outright, they can always opt for Car Loans. Most families opting for Car Loans do so out of necessacity as they require a car, but cannot pay the full price. But care should be taken to plan for the Loan installments and managing finances, especially if you are a salaried employee. Many people also give in to their desire to drive a new car and succumb to the sales talk and opt for a Car Loan. These people do not think about their financial situation and default on their Loan installment, which leads to a bad credit rating for the future.

A bad credit rating means that you will have problems applying for loans in the future, even if you later on pay up the installments. But there are many car loan companies, which do give a second chance at Car Loans in spite of a bad credit rating. But this depends on a case-to-case basis and is not a rule for all defaulters. If you are a habitual defaulter and have always paid your installments very late, or not paid the installments for a few months, you are highly unlikely to get a Car Loan.

If you do require Car Loans, you should first inquire with the Car dealers about the down payments, inquire with the finance company regarding the interest charged on Car Loans, duration of the Loan, installments, penalties for defaulting on installments, etc. then you should go through your finances and calculate whether you will be able to pay the installments properly, with a little left over from your income for emergencies. If the loan payments fit into your finances and you can manage to pay the installments, you can safely go for Car Loans.

For more information on Regular Finance for Car Loans (English), or a Second chance at financement voiture (French) - in Quebec - Canada - Please do visit this site or write to them.

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