Fast Auto Loan Options
When you buy a car, you have several financing options. We'll explain the various types of fast auto loans and discuss the pros and cons of each.
Dealer Financing
Most carbuyers choose to finance at the dealership out of convenience. Though dealership financing may be convenient, the price you will pay for this convenience is probably not worth it. Dealers function as a middleman between you and the actual lending institution, which means they inflate the interest rate of your loan to pocket some of the profit. Dealers can sometimes offer fast auto loans, allowing you to apply and drive away with the car in one fell swoop. However, dealer financing is one of the most costly options for fast auto loans. Some consumers are not aware that dealers often make more profit on the financing of a vehicle than they do on the actual sale. Thus, you should be wary of taking out fast auto loans at the dealership.
Pre-Qualifying for Independent Financing
Pre-qualifying for independent financing, such as third-party fast auto loans, may enable you to get a better interest rate. Pre-qualifying for fast auto loans on our website is a smart idea because then you are protected against any future rises in interest rates while you car shop. Walking into the dealership with pre-qualified fast auto loans also gives you more negotiation leverage because you force the dealer to compete for your business. Generally, third-party fast auto loans are the quickest, cheapest way to finance a new vehicle.
Home Equity Loan
If you are a homeowner, you also have the option of financing your new vehicle with a home equity loan. Home equity loans have two advantages over traditional fast auto loans. For one, home equity loans are secured against the value of your home, which means lenders can offer you lower rates than with other loans. Secondly, the interest on home equity loans is usually tax-deductible. On the other hand, home equity loans typically require a lot of paperwork and a time-consuming approval process, so they will take much longer than other fast auto loans. Similarly, if you fall behind on your payments on home equity fast auto loans, you could lose your home. For many, this is too large of a risk to take for a car.
0% Financing
With few exceptions, 0% financing is not a good deal. First of all, very few people have the credit required to actually qualify for such offers. Secondly, fast auto loans with 0% financing usually come with an abbreviated term, usually two or three years, which means your payments will be sky-high. You are almost always better off choosing independent fast auto loans with low interest rates rather than dealership 0% financing. Please make sure you know how to choose the right auto loan before you sign anything.
