Auto Financing
The Car Allowance Rebate System better know as the Cash for Clunkers Program does not provide consumers with any help financing their vehicle purchase.
Millions of clunkers which qualify for a $3,500 or $4,500 credit towards a new car are being driven by owners who do not have the cash to purchase a new car, even after the price is reduced by $4,500. And if they do have the funds they may not want to deplete their savings in these uncertain times. This means that you're either leasing or financing the car. The vast majority of people choose to finance their vehicle purchase because they don't want to deal with the potential back end expense of leasing which occurs when they exceed the mileage limits of the lease.
Sources of Financing
1. Online financial institutions - Online financing is usually the most competitive, quickest and easiest method to obtain a car loan. On the downside its not a face to face personal service. If you would like to apply for a FREE , no obligation loan through CarsDirect's National Network of dealers click here. CarsDirect's Network specializes in auto loans for bad credit, good credit and even past bankruptcies.
2. Dealership - This can be convenient and fast. But is is usually not competitive and is high pressure. Be prepared for a big sales pitch and an attempt to sell add ons to the deal you made with the salesman. Be careful of front loaded payments where your paying more interest in the beginning of the loan versus the end. You could end up owing money on the car when you go to sell it or trade it in down the road.
3. Bank or Credit Union - Rates are usually competitive and you'll receive personal service, plus no add-on push. On the downside its not nearly as convenient as obtaining a loan on-line or through the dealership. Most banks are closed on the weekend and at night.
4. Home Equity Line - On a home equity loan you can deduct some of the interest on your taxes. Also the rates are competitive. But remember tying your car to your home can be risky. If you have trouble making the car payments, you could lose both your car and your home.