A person even with a bad credit history can get a car loan approval. These buyers usually just need to attend a dealership that works with dedicated financial lenders. However, there are also some requirements that must be met for a borrower to qualify for an auto loan.
Life in the USA is arranged in such a way that it is very difficult for a person to live and work without a private car. For the average American, a private car is nothing more than a means of convenience. Preference is given to expensive cars with a high guarantee of technical serviceability.
The fact is that any breakdown is expensive for the Americans. This is in CIS countries, you can ask a neighbor or friend to see what happens with your car and ask for help. Also, we have a lot of service stations at home, in ordinary garages, where a car will be repaired for a small fee.
There is no such thing in America. If it is necessary to eliminate the breakage in the car, you should contact a specialized service. Therefore, in this matter, the Americans act on the principle “I’m not rich enough to pay twice.”
Buying a new car in America
If you are one of those who decided to buy a new car, it will cost you much. The cost of an unused vehicle ranges from $18,000 and up. Luxury cars will cost you from $60,000. You also need to take out insurance and pay tax for the purchase. The costs will depend directly on the cost of the car.
Disadvantages of buying a new car for cash is high cost. Not everyone can afford such a waste. Moreover, in the future, the sale of such a car will not bring profit. Its market value will decrease, you will also have to spend money to put the car in order, pay for the dealer’s services. Among the advantages there is the warranty period of the product. For 3-5 years, you can safely use the car without worrying about breakdowns.
Buying a used car
In the United States, the sale and purchase of used cars is also practiced. Buying a used vehicle is much more profitable than buying a new one. At the end of the warranty period, the cost of the car may drop in half. In America the risk of buying a low-quality car is minimal. And, nevertheless, you need to be cautious before buying, subjecting the car to a complete diagnosis in a reliable service.
How to buy a car on credit?
The most popular way to buy a car is to issue an auto loan. This service combines both purchase and leasing, that is, you make payments monthly, but for your own car. But in case of delays, the bank will impose a fine on you, or confiscate it.
Buying a car on credit has its advantages:
- the possibility of purchasing if the entire amount is not available at once;
- depending on the rate of solvency, you can take both a new and a used car;
- low interest rate – from 3%, depending on the credit rating.
- service only for solvent clients with a good credit rating;
- if you are a foreigner, guarantees from US citizens are required.
What else do you need to know about an auto loan?
- Do not rush to apply for a loan in a car dealership, you can ask banks about their terms and rates;
- with regular payments, the interest rate may decrease in six months or a year;
- obtaining a loan or leasing will have a positive effect on the credit rating, subject to timely payments.