When buying a car there are many options available to you, but perhaps one of the most popular is car financing. You can find car finance options with many different lenders, from banks with loan options to private lending companies. You can also arrange finance deals with the car dealerships themselves. However, not all lenders are the same, and it pays to be astute when you arrange financing. This article will look at the responsibilities on the part of the lender and the borrower when it comes to car finance. Both sides have responsibilities that are clear, and if they are not adhered to, real problems can result.
One responsibility that lenders have is fairness when selling. If you walk into a car dealership and it offers finance, the last thing you want to be doing is experiencing an aggressive ‘heavy sell’ from the person who can offer you finance. If you do your homework on the kinds of financing that you can take on and the budget you have overall, you can confidently state the kind of finance deal that you want, if you want one at all. This allows you to avoid or at least manage any pressure selling.
The majority of lenders are responsible. But it is also important to be ready for pressure. By knowing what you can spend and how that will best serve you, you can focus on asking for the kind of finance that you want and can afford.
The life of the loan
You can also ask the car loan lender for a full explanation of the life of the loan that you are being offered. The responsible finance lender should be able to offer you an attractive deal, and then talk through the exact implications of any finance package you are offered. Some less scrupulous lenders sometimes sell their loans off to third-party bodies. These third party elements will buy them and then add more interest on top to recoup the loss incurred through the purchase. Ask the lender to be absolutely clear on who is lending the money, and what that loan will look like in the months and years ahead. It makes much more sense to be able to see the road ahead rather than regret your actions later. And a responsible lender knows this.
Finally, the responsible lender should be comfortable with you taking your time over the purchase. You should be allowed to spend time on the decision, and not be rushed. Any lender who has any sense of responsibility will be happy for you to go away and think about it overnight, or even just to call back when you are ready. It’s your choice, and the lender who doesn’t respect this is most likely someone who just wants a sale, not someone who wants to help you find the right car with car finance.
There is a lot of responsibility attached to lending, and you need to ensure that you are sitting across the table from someone who is genuinely trying to help. Fortunately, they are quite easy to spot.