Getting The Best Finance Deal On Your New Car

Most people who buy cars are under the impression that the financial arm of the car manufacturer offers the best rate of interest on cars

. The reality is that these finance companies are a separate entity. These companies have to profit from the finance that they give you to buy the car. So don't assume that you will get the best rate from them. Also, there are many people who rely on the dealers to give them finance at low rate of interest. It is in your interest to find out the market rate before you strike a deal with the dealer.

There are many manufacturers that offer 0% finance on cars to increase the sales of their vehicle. Some manufacturers may not only offer 0% finance on cars but also offer cash incentives on certain models made by them. Usually, car manufacturers give good discounts and rebates on high value cars. At times, manufacturers may also give discounts if they are trying to get rid of a particular model that they are unable to sell.

Some manufacturers may give you an option to either choose 0% finance on cars or receive cash incentives on the car. When given an option to choose between a cash rebate and low interest financing, you need to calculate the savings you will make on both the options. If there is only a small difference between the benefit that you receive in low interest financing and cash rebate, it is always better to choose the cash rebate as you get an immediate cash benefit.

If you have a good credit rating, you can get finance at a low rate from banks and other financial institutions. Most lenders readily give finance to buy new cars as the new car serves as collateral for the loan that you take. If for some reason you default on your loan payment, the lender can take possession of your car. This reduces the risk to lenders, which enables them to finance your car purchase at low rate of interest. You can also reduce your rate of interest when you make a large down payment. When you make a large down payment the lenders' risk is reduced and they can offer financing at competitive rates. For example if the value of the new car is GBP 25,000 and you make a down payment of GBP 15,000, the risk of the lender is just GBP 10,000 on a car that is valued at GBP 25,000.

You can also trade in your old car as a down payment for the new car. However, it is in your interest to check the price of the used car before you sell it to the dealer. At times, a private party can give you a better deal than your dealer. If a private party gives you a better deal, then it best that you sell your old car to them. You can use the money received from the sale of your old car to make the down payment on the new car.

You can also get low interest rate financing if you are a member of a credit union. Also, if you get a good car financing deal from banks and other finance institutes, it is best that you opt for cash rebates.

by: Roger Thurston

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