Although car financing can enable you to acquire a vehicle without the hassle of having to pay a full-cash payment for it, the cheapest car finance can, however, be costly in the long-run. Most car buyers hardly take time to shop for proper car finance. Actually, they opt for the cheapest car finance not knowing that there are hidden costs involved. To ensure that you get the most out of your next car finance, below are some of the hidden costs you should be aware of prior to getting the cheapest auto finance.
Extended Car Warranty
Also known as service contracts, extended car warranties cover for the costly mechanical and electrical vehicle components that aren’t catered for by the manufacturer’s warranty. Most car loan finance brokers also offer extended car warranties, thus inevitably increasing the price of your auto loan. If you opt for the cheapest auto finance, therefore, negotiate the cost of extended car warranty or pay for it in cash to lower your car costs in the long-run.
Guaranteed Auto Protection (GAP) Insurance is a common cost that most car buyers aren’t aware of prior to resorting to the cheapest auto finance. Basically, the cost caters for the difference between your auto loan and the amount your auto insurer will pay once the car is stolen or gets damaged. Before getting the cheapest auto finance, appreciate the fact that you might end up paying higher monthly payments because GAP insurance will be combined with your auto loan.
This hidden cost normally applies when you are purchasing a used vehicle. When the vehicle is already registered under someone else’ name and a car loan finance broker is offering the vehicle up for sale, there are some registration fees that you will need to pay so that the car ownership can be transferred to you. Cheap auto finance doesn’t take registration fees into account, but these fees have to be included in the final price of the vehicle, meaning you will eventually pay more than you expected.
When it comes to buying either a new or used vehicle, getting the cheapest car finance may attract several hidden expenses that will eventually increase your auto loan. Before getting car financing, therefore, consider whether there will be any hidden cost involved and how they will affect the final price of the vehicle you intend to purchase. Preferably, don’t settle for the cheapest car loan finance broker because you’ll incur a wide array of hidden costs that will undoubtedly increase the amount you will finally pay for your vehicle.