Basics of a car loan

Aug 2 2010 If you are one of those who is desperate to buy a car and is always on the lookout for a great offer, then before you ultimately take the plunge, it is worthwhile reflecting on some issues. This is specifically true if you are looking to take any car loan in order to fulfill your desire of owning a car.
a) You need to sit down and make a realistic assessment of the expenses you are currently incurring every month and whether you would be able to afford payment of that car loan. Typically, you should go for that car loan only if it does not exceed twenty per cent of your take home. Yes, you can always make it attractive by going for a longer tenure loan but will end up paying much higher at the end of the term.
b) Avoid the dealers as their finance interest rates are usually high. Instead, look for a credit union or a bank that tend to have lower interest rates and select the one giving you the best deal.
c) Select the right type of car loan and in this regard, the tax-deductible option is the ideal one.

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