Pre arranged auto finance, the way to go.
What does pre-arranged auto finance mean? Why should you consider it? Let’s paint a picture to describe what happens when we buy a car with finance.
You decide one day that you need a car. Maybe it is a new car, or your first car. You haven’t got the cash to pay for it, especially the car you want to buy. But no worries the car dealer promises a low interest rate and no down payment. So you drive, or walk, down to the car dealer and check out your dream car. You talk technical details, what extras to get and after a few hours you are set to go. You have bargained a little for the price and you are happy with the deal you got. There is just one more detail, to arrange the finance.
At this moment the car dealer has you by the short and curlies, you pretty much have to accept their offer for finance or try and get it elsewhere at this late hour without any assurance that you will get it or that the car will still be there when you get your finance.
It is quite funny that we have got used to this way of buying. A good example of how capitalism has got a hold of us if we don’t even blink about buying an expensive item we can’t afford unless we get it with a loan that will last for years. Just imagine what you would think if someone went to a supermarket, started bargaining on the price of a liter of milk and once the price was settled left the supermarket to try and find someone who will lend you money or alternatively try and get the supermarket to lend you the cash. You would consider it ludicrous. However that is what we do every time we purchase a car on credit without having arranged for our finance beforehand.
Wouldn’t it make more sense to arrange your cash before you went to the supermarket. Maybe asking your neighbor, father, friend for a small loan and then buying the milk. The same principle applies to car dealers. Just that in the case of car dealers it makes even more sense to arranges your cash before you go.
What is pre arranged finance?
Pre arranged finance involves going to a bank or finance company and arranging for a line of credit you can work with when you choose the car you want. This provides you with a maximum of cash you have available. This is a great way of buying a car. Why?
1) You tend to get a better interest rate and conditions. Arranging for a multi-thousand dollar loan as an afterthought is not the best recipe for a great deal. When you take it easy and look around for a good deal the chances of doing well with your finance increase.
2) You have a much stronger hand when bargaining for a better price on a car when you are effectively paying in cash.