If you’re thinking of buying a used or new vehicle, there are a few different ways in which you can finance your purchase. 

Although you can pay cash when you buy a car, almost 80% of the people buying cars today use a car financing option. This is more affordable because you are able to break the car payments down into monthly expenses, instead of having to spend a big amount of cash at once.

Of course there are pros and cons to each different option of car financing. You should consider these carefully before you decide which one you will use. 

0% Financing Is One Of These Options. 

0% financing allows you the option of extending the amount of time in which you can pay the car finance loan back. This is without the interest that you often have to pay when you take out a loan. This option is what the car retailers like to use to interest customers and bring them in. 

It’s difficult to qualify for this loan though, as your credit score needs to be quite high. Also the amount of time in which you are expected to pay the loan back is a lot less than with some of the other car financing options. You could be asked to pay the whole loan back in 36 months, instead of making smaller payments over a longer period of time. 

The second option is one which offers you a cash-back incentive. When you look at the two options, the 0% APR financing option and the cash back offer, you can compare which one is more suitable for you. 

You do this by working out the amount of interest you will have to pay during the whole length of your loan when you choose the cash-back option. If you find out that you would have to pay more interest than the amount of cash-back you would receive, you would be better off choosing the 0% APR deal. 

The next car finance option is having the opportunity of getting into your dream car without putting any money down. For many people a great incentive is not having to pay a down-payment. Many people simply do not have a lot of extra money to put towards a down-payment. 

You may end up paying much more in interest in the long run. Also, monthly payments will of course be higher. However, the advantage to this option is that you can get your car without paying as much upfront. 

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