Buying your next vehicle can be a decision made by necessity – you need a larger car due to an expanding family, or you want a smaller one because you have less space to park after a house move, for example – or through choice, but whatever your reasons for wanting a new vehicle, you are always going to need to finance the purchase. Here are some of the best ways you can do that; get your finances in place before you buy, and you will be able to make the process a much quicker one.

Sell Your Current Car 

One of the easiest ways to finance a car purchase is to sell your existing one. You can search online if you want to sell your car to get the best price and then sell it ahead of time. Although this does mean that you will be without a vehicle for a little while, this inconvenience can be offset by the buying power you will have if you are going to pay cash for the new car outright. 

If you don’t want to do this because you need your vehicle or it seems like a hassle, you can trade your car in at the dealership. Want the best value for your trade-in? If so – and who wouldn’t? – the best thing to do is check online first, so you know the kind of price to expect, and you can haggle if necessary. 

Personal Loan 

If you can find a loan with a good interest rate, then this can be another good option for purchasing a new – or used – vehicle. After being approved for the loan, the lender will pay you the money, often directly into your bank account. This means that you can then effectively pay the car dealership or seller cash, and this gives you the opportunity to haggle over the price or try to get some extras into the deal. 

Make sure, however, that you are able to pay back the loan every month. If you miss a payment, or more than one payment (depending on the terms of your agreement), then your credit score will suffer, and the interest will build as well as penalty charges. If you continue to miss payments, the car – which won’t belong to you until you make the last payment – will be repossessed. 

Installment Plan

An installment plan is similar to a personal loan in that you will be repaying the cost monthly at a set interest rate (or if you can find a great deal, no interest at all). These agreements are done by the car dealership itself and can often be quicker and more convenient than obtaining a loan from a bank.  

In some cases, fewer checks will be made when the dealer is arranging a finance plan than if you went to a bank to ask for a loan, and as long as you know you can pay the money back, it shouldn’t be too difficult to obtain the funds you need. Again, a good or even fair credit score is crucial if you want to get the money and pay it back at reasonable rates.