Financial institutions like Axo Finans look at your credit history and credit score before they take your application into consideration. From your credit history they can get a lot of information about your payment habits with which they determine their risk percentage. If you are regarded as a high-risk client, your interest rates may be higher.
The interest rate is mostly determined by the length of the loan. Usually, the shorter the loan, the lower the interest rates. Also, finance for pre-owned vehicles sometimes comes with higher interest rates than finance for new cars.
If you decide to take out dealership finance
If you opt to apply for a consumer loan your new or pre-owned car through a dealership, there are certain factors you need to take into consideration. Firstly, the finance and insurance department of a dealership often generates bigger profits than the actual car sales department. Car dealers usually manage to get the lowest possible interest, after which they mark it up, ensuring maximum profit.
Keep the following in mind:
Interest rates, loan terms and add-ons:
Remember that interest rates can be negotiated. Ensure that every part of your transaction is detailed in your agreement, double check that all the information is correct and find out whether repayment penalties will be applicable. Also, car dealers will always try to push the sale of extended warranties on your new car. Remember that most new vehicles warranties are so comprehensive that extended warranties are often unnecessary.
Shop for money before you shop for a car
Exploring all of your financing options before you get to the point where you sign on the dotted line is not a bad idea. Don’t let the excitement of driving your new wheels cloud your judgment and objectivity. Get as much information as possible about all your options. So, once you have established your budget, shop for the money first. Visit your bank online to get an idea of their interest rates and basic loan costs. The fact that you already have a relationship with your bank may just get you a great deal. Banks will also be able to give you an idea of what exactly you can afford.