When buying a car it is very important to consider the financial implications ahead of time and effectively plan based on the size of your income. You can buy a new or a used car based on the size of your budget. Sorting finance could be through Loans or lease and this comes with financial risks especially if one does not understand the terms of agreement very well.
Buying a car is becoming more expensive as the average cost of cars both old and new has become greatly increased. In addition new add-ons on new cars may mean more cost and it is important to know about these add-ons before agreeing to the contract.
New or Used Car Loans
When taking a Loan in order to buy a new car it is important to consider your average income after tax and all other expenses have been removed in order not to go bankrupt in the course of payment of the loan. Also new cars usually come with higher interest rates when compared to used one.
Leasing a Car
Leasing a car also may be a good option to consider, especially if you are someone who loves to change cars in a short period of time. This will help you save cost and reduce the amount that would be spent on buying a new car.
Rising Auto Loan Prices May Make Gap Insurance More Attractive if you are making a small down payment and your loan exceeds a period of 48 months. It factors in the depreciation as well as negative equity in vehicles. This also makes refinancing much easier just in case the car has an accident or is stolen.
Gap Insurance also helps if you travel often and especially long distances as more wear and tear causing depreciation. If you are leasing gap insurance could also offer an added level of financial protection in case something happens to the car.