Atlanta Auto Loans

Atlanta auto loans can take many different forms, and they are only one of the many options borrowers have when it comes to car financing. We will present a few of the most popular financing options here and discuss their benefits and drawbacks.

The Traditional Route

Traditional Georgia auto loans come in two varieties, one less common than the other. The first is what most borrowers think of when they think of car financing: dealership financing. Strictly traditional Atlanta auto loans usually come from dealerships that shop out your loan application to different banks. One of their lending partners then accepts the loan and quotes the dealer an interest rate. The dealer then inflates this rate to make a commission on the financing package and quotes the inflated rate to you.

The second type of Atlanta auto loan is called an independent or third-party loan. These loans are identical to those offered by dealerships, but they come directly from a bank instead of being filtered through the dealer middleman. As a result, independent Georgia auto loans have much cheaper interest rates than dealer-issued loans. Without a dealer hiking up your rates to boost his profit margins, your loan will have a much more affordable interest rate. Brick-and-mortar credit unions and banks can offer independent auto loans, as can online lenders.

The Risky but Rewarding Option

Homeowners have yet another type of Atlanta auto loan available to them in the form of a home equity loan. This is not a car loan per se because it simply converts the equity you have in your home into cash. How you use that cash is up to you. In this case, you would apply it toward the purchase of a new vehicle. The biggest selling point of home equity Georgia auto loans is the unbeatably low interest rates they can offer. Your house serves as collateral, which means the bank is taking less of a risk and can thus charge you lower rates. However, as a borrower, you are taking more risk because you might lose your house if you default on this kind of loan.

Leasing

Leasing is an ideal option for people who like to get a new car every two or three years or for those who want more car for a lower monthly payment. With a lease, you make payments every month just as you would with Atlanta auto loans, but the payments do not accumulate equity in the vehicle. Once the lease is up, you do not own the vehicle. You might have a buyout option at the end of your lease, but this would involve taking out another Georgia auto loan in order to pay for the vehicle. The downside of leasing is that you forgo the pride of ownership, for one, and you also face mileage restrictions and potentially costly fees. If you exceed the annual mileage limits or damage the vehicle in any way, dealerships can charge you an arm and a leg in penalties.

Another option you might have to choose from is buying a new car of fixing your current car. We have given tips to help you decide what you should do.