Finance a car
Too some people, financing a car can be easy while it can be a hard thing for some people. In either ways, car isn’t an investment that someone must be keeping for future purpose. It is a liability that has its value depreciate with time. At a time, some part of the vehicle like the tire start wearing off, the engine start having problem and the charges for the repair starts accumulating which makes the management difficult.
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Car can be financed as low as a thousand dollar and as much as twenty three thousand dollars and the financing depends on the type and model of the vehicle.
Experts advice on Car financing
Some finance a car for the purpose of making profits. Before planning car finance, there are some recommendations from experts around the world that should be followed for extra protection:
- The capital at hand should be considered when financing a car. Understanding if the capital at hand will be enough for the finance of the car is a great deal. The profit from the car if the financed car should be leased out to another borrower. You should consider what the purpose of the car for before financing it and how to bet money in financing it. The down payment and mortgage payment should be considered. If the car is just for personal use, the personal income of the household and the savings should be looked into properly. For example, if the personal income of a household is $5,000 and the monthly expenses is always around $4,500, it is so certain that it will be difficult to finance a car of $12,000 without the person being default. But if the car being financed is to make profit, the car can be leased out to a potential borrower who can deliver monthly. Let’s assume the mortgage payment for a $10,000 is $1000 per month. If the car it to be leased out, the borrower should be able to deliver at least $1,200 per month so that you will be able to cover the mortgage payment and also have something in hand for unforeseen circumstances. When all these things are being considered, also remember that the moving cost of the vehicle from point of buying to the where the car is going is also included in the capital so also are the taxes, the particulars and so on.
- If there is no enough capital for the financing of the car, another method of financing the car can be through seller financing or owner financing. Seller financing is a type of financing in which the dealer will contact a finance company on behalf of the borrower to get help in the financing of the car while the borrower pays the mortgage payment directly to the finance company instead of the dealer. The owner financing finances the car himself with his own money while the borrower make the mortgage payment to him directly. The dealer serves as the lender himself.
- Either of the two financing method stated above, the car can be leased out to another borrower to get the car mortgage payment made. For example, a car that has four months installment of $2000 monthly, the car can be leased out for $2,300 monthly for the purpose of paying off the debt and also having gain on the car. The dealers, the lender and the borrower all gain from this without any prejudice. If the mortgage payment on the car is not made before the end of the agreement or when the borrower defaults, the lender or the dealer has the right to collect the car back and sell to another potential buyer who is ready to pay.
- Taxes and fees are easy things till they managed on time but if some misses them out and forget to pay on time then they become huge headache. So make to pay taxes & other fees and extras to pay before time. If you buy a car on installment basis and you have refused to pay the tax, when the government officials get you, it might be difficult for you at this time to pay for the installments again as the money would be used to pay for taxes. The agreement form should be signed and the down payment should be made. The agreement form shows the consequences of defaults, the terms and conditions and so on.