While paying upfront fees entirely is the best way to buy a car, most of the new jeep purchases are financed through borrowed money. According to the USA Today, most vehicle purchasers are making the wrong turn on auto financing. Thus, it pays to understand every new jeep financing option available. Here are the 6 most common financing options:
Most jeep dealers offer financing for the cars they sell. They will arrange for all the financing requirements. They are a one-stop-shopping for both the car and financing, although they often offer a single take-it-or-leave-it quote, which gives you no room to shop around and compare other interest rates. Moreover, their loan terms and interest rates may not be as competitive as the other financial options.
With this type of financing, you will be working with the dealer to leverage the special financing deals that manufacturers offer. You can find these offers on commercials, adverts, or your car salesperson can inform you about them. Manufacturer financing has low rates, but are normally offered to individuals with excellent credit scores.
For most people, bank auto financing is the ideal option, especially if you have a good working relationship with the bank. The bank will negotiate shorter loan terms and lower – 2% to 4% – interest rates depending on your repossession history and credit score. Consequently, you’ll have the advantage of knowing how much you can afford before shopping around for the jeep. Nevertheless, this financing option might cost you time and money due to the bank trip you’ll make and loan paperwork.
Credit Unions financing
Financing your new jeep through credit union requires you to understand your upfront financial terms and conditions before shopping for the car. Typically, credit unions offer better interest rates than the bank and dealers (although some might offer higher- ensure you fully understand the interests before signing any dotted line). The downside of this financing is that eligibility requires you to be a member of the credit union.
Online Auto Financing
With technology advancements, online auto financing has become increasingly popular. You can now search for new jeep financing at the comfort of your home. Online financiers will help you do everything including filling out the auto loan application and getting your pre-approval amount. They can also offer lower rates than conventional credit unions and banks since the cost of doing business is generally low.
Lease Buyout financing
While it’s not a conventional financing option, more people are beginning to embrace it. According to Statistic Brain, 21% of car purchasers are leasing from Buyout financing. Typically, you will make your monthly payments, but the dealer will remain to be the vehicle’s official owner. At the end of payment term, you can decide to either pay the final installment to become the owner or return it to the dealer.
Shopping around is crucial when you need to borrow money to get your new ride. As overwhelming as it can be, compare all new jeep financing options and figure out the best one that will work for you and your financial situation.