One of the biggest mistakes first-time car owners when buying a new car in the Philippines like the Toyota Innova is neglecting to include the cost of financing in the total price. If you are willing to negotiate the price of the car itself, you should not forget the terms and rates of your financing.
Buying a new car is not going to be an easy decision for you. Besides considering the running costs, you should also determine your financing options, from buying the car outright to buying it on finance. Your car is probably the second most expensive thing you will ever buy after your home. It is important for you to make sure that you choose the best way to buy a car, so here are some of the best financing options when buying your own vehicle.
This option involves you applying for financing through the dealership itself. You and your car dealer enter into a contract where you buy the car and also agree to pay the amount you need to be financed, in addition to a finance charge, over a period of time.
Generally, the dealer will then sell this contract to a finance company, a credit union, or a bank. These institutions then service your account and collect your payments.
By choosing to finance your vehicle this way, you can enjoy:
- Multiple financing options
Your dealer has probably established relationships with a wide variety of finance companies and banks, which means that they may be able to offer you a wide range of financing options.
- Special programs
The dealer can sometimes offer you a low-rate, manufacturer-sponsored incentive program. This program may be limited to certain cars or might have special requirements, though, including a shorter contract length of about 36 to 48 months or putting down a larger down payment. Check to see if you qualify for any of these special programs because they require a strong credit rating.
Your dealer, car, and financing can all be found under one roof for easy access. Most dealerships might even have extended hours like evenings or weekends.
With this option, you agree to pay the amount you financed, including an agreed-upon finance charge, over a period of time. Direct lending sees you borrowing money directly from a credit union, bank, or finance company. You can then use this loan to pay for the car once you are ready to buy from a dealer.
Direct lending allows you to:
- Have your credit terms in advance
You can know your terms in advance, including the length of the term, maximum amount, and the annual percentage rate or APR if you get pre-approved for financing before you shop for a vehicle. You can then bring this information to the dealer in order to improve your ability to negotiate.
- Comparison shop
You are able to shop around and ask several lenders about their credit terms even before you decide to buy a specific vehicle.
Before you choose the financing for your new Toyota Innova here in the Philippines, shop around and compare different terms offered by more than one creditor. Remember, you are looking for two products: the car and the financing.
Consider several offers and negotiate your terms. Make it a habit to compare when you are shopping for financing to find both the car and the financing terms that best suit your needs. Take the time to know and understand the conditions, terms, and costs to finance a car before you sign any contracts.
Lastly, get a copy of the signed papers if you sign a contract before you leave the dealer or creditor. Before you leave in your new vehicle, make sure that you understand whether the deal is final.