People have to work to survive. The desire to maintain increasingly indulgent
lifestyles drives 13% of workers to travel over 100 miles a day to get to and
from work. These so called ?stretch commuters? make the majority of these trips
by personal vehicle, but when it comes to trading in their tired automobiles for
newer models should they just settle for a bank auto loan?
Stretch commuters do not have a lot of time on their hands. They spend most
of their working week either at work, or travelling to and from it. When they
get home exhausted the last thing they want to do is to look for the best deal
for a car loan. Therefore, getting a bank auto loan is the easiest and most
convenient option.
Let?s quickly take a look at some of the advantages and disadvantages of
this.
Advantages of bank auto loans
1. Convenience ? Most consumers with checking accounts have held their
account with one bank for a number of years. This may be due to inertia, but it
is easier to manage finances if check accounts and a bank auto loan are held in
one place.
2. You know your own bank ? banks have strong brands and financial strength.
They have spent years building a good reputation in society. This engenders
trust from their customers who may find it daunting to take out a car loan from
an unknown finance source.
3. Lower rates than car dealers - Bank auto loans will probably be able to
provide you with lower interest rates than dealer loans. Most banks will offer
to pre-approve customers for their loans so that they will have better
bargaining power on the car lot.
Disadvantages of bank auto loans
1. Not necessarily the best rates ? Even though banks have financial strength
they may not be able to offer the best car loan rates. In a recent study by
bankrate.com, the average interest rate offered on a 48 month bank auto loan was
almost 2% higher than those offered by Credit Unions!
2. Placing All your eggs in one basket ? Everyone has heard that saying and
although it may be convenient why should consumers place all their finance needs
with one institution. There are so many other deals out there.
3. Perfect or excellent credit preferences ? People that have car loan bad
credit or a damaged credit score for any other reason may be turned away. They
may have to finance their car by taking out a bad credit loan and may find that
this is not offered by their bank.
Even though free time may be scarce for stretch commuters, and anyone who has
a need to finance a car for that matter, researching all relevant products with
banks, credit unions and auto finance specialists is worthwhile. Go online as
rates, terms and product benefits can all be researched from the comfort of
home. Investing a little time, rather than opting for the ease of taking out a
bank auto loan could save consumers money.
