There are two ways to buy a car: you can pay for it all at once, or you can get it financed. Paying for it all at once is typically known as paying cash; while almost no one pays for cars with stacks of cash, that’s generally what it’s called. Far more commonly, you will get a loan to pay for your vehicle, and then pay back the lender. That’s called having your car financed. It is the most affordable way to get a car because you don’t’ have to pay lump sums when you buy the vehicle. Even if you might have the money to afford it in the bank, you will likely want to have it financed so you can pay smaller amounts every month. That will make sure you have money available. So, how do you get your car financed?
First, you need to decide who is going to do the financing. You have a couple of options for your NZ car loans. If you want to have your car financed, you can choose a third-party lender or the car dealership itself. Financing from the car dealership is often the easiest and most straightforward way to have your car financed. It’s easy and straightforward because the dealership will know exactly how much money you need for your vehicle since they’re the ones selling you the vehicle. Also, they will be much more encouraged to help you get your car than a third-party lender might.
Assessing Your Assets
First, the lenders will assess your assets; they’ll figure out how much money you have available and how much collateral you have. You’ll tell them about how much you want to pay each month, and how much you’d like to pay in total. That’s one of the reasons it’s great to choose financing from the dealership, for they’ll be able to tailor it to your needs as well as specific vehicles.
You will also need some collateral to offset your expenses. The collateral is the assets you have that can offset the cost of the vehicle if you’re unable to pay for it. For example, if your car costs a certain amount but you can’t pay it off; if you have an accident or if it needs to be repossessed, the dealership will want to recoup their losses. They’ll do that by placing a lien on your assets, or by repossessing the vehicle. The amount of money you’ve paid so far will determine how much the dealership needs to recoup after you return your car. That means the more stable your income or the more assets you have, the less you’ll have to pay each month.