Car finance refers to all the different financial products that enable a person to buy a vehicle, such as loans and car leases. In the process of getting Car Loans financing for a new car many people get confused about the different car finance options available. This can really be confusing because, apart from car dealerships offering loans, there are many other sources of finance available to people. When you look at car finance options it is important to consider not just the cost of the loan, but also the interest rates that you will have to pay over the term of the loan. Here we will take a look at some of the most common types of car finance that are available to people today:
Car EMI or Employer Financed Interest is calculated by looking at the total cost of ownership of the vehicle. Car EMI includes all the costs, such as road tax and insurance, that are associated with buying a vehicle. The loan that you get from the dealership is usually repayable against an asset, such as equity in the car or an asset owned by you. This means that the cost of the loan will be based on what the dealer wants it to be based on the value of the car that they think you will be able to get. It is then possible that, if you go to sell the vehicle before the end of your loan period you could lose out, because the dealer will want to take their deposit instead of yours.
Car EMI and Car Finance Calculators There are some great online calculators available to help you work out what the cost of your loan would be and how much interest rates would be on different types of loans. These online calculators are easy to use and are available from a number of websites. All you need to do is input the details of the car you wish to purchase, your loan tenure and the cost of insurance into the car calculator. From this, the monthly payments and the annual mileage that you would drive will be calculated and this should give you an indication of what sort of deal to look for when shopping around for car finance.