Six Different Options for Financing a Car in Missoula

Car financing involves taking out a loan from a financial institution that you’re required to pay back with interest, usually on a monthly basis, at a predetermined rate. If you’re looking to buy a car in Missoula, you can choose from several different financing options.

1. Dealership Financing

Many people in Missoula select dealership financing, which means the dealer you buy your car from offers you a loan that is typically provided through a third-party lender. This is a popular option because it’s very convenient.

However, financing from car dealers could potentially involve higher fees than other financing options, so make sure you shop around to find the best dealer with the best financing rates before you start actually looking for the vehicle you want.

2. Bank Financing

Sure, it won’t be as convenient to get your financing from a bank and your car from a dealer, but there are advantages to financing the cost of your vehicle through a bank loan.

For instance, a bank, or a similar entity, such as a credit union, can help you to calculate your financing budget and you will often be able to get better loan terms.

Furthermore, banks and credit unions shouldn’t pressurize you into financing a car, as some auto dealers may do.

3. Online Lender Financing

One of the simplest and best ways to finance your car is to compare different lenders online. Many online lenders partner with car dealerships. That means you can prequalify for a loan and shop for eligible cars on one single platform.

Car financing is a great way to build credit to pay for your vehicle and you can often get the most affordable rates by shopping around.

4. Refinance Loans

The above options for financing a car in Missoula are known as purchase loans, but there are other kinds of car financing options available, such as a car refinance loan.

A refinancing loan is used to pay off your current car loan and get a better interest rate for the new vehicle you purchase. While most lenders provide both purchase loans and refinancing loans, some specialize in the latter.

Refinancing doesn’t always make financial sense, but if you have already paid for a couple of years and are in good financial shape in comparison to when you first took out the loan, refinancing could be a suitable option for you.

5. Lease Buyouts

Another option that may suit you is a lease buyout. That means having the option to buy a vehicle after leasing it. So, you would finance your lease buyout to pay the amount you owe on the car and set up a payment plan with the lender.

Of course, you’ll need to lease a car first of all. That would involve paying a monthly fee, which is usually less than the cost of a car loan. If you lease a car and don’t want to buy it, you must return the vehicle at the end of the lease period, and you could be charged for excess damages.

6. Cash Payments

Lastly, if you have enough savings, you always have the option to finance your new car by buying it outright. You’ll then not have to make any monthly payments.

While everyone would like to buy cars without accumulating any debt, the majority of people don’t have the available funds to choose the cash payment option.

But if you do have enough spare cash, it could make more financial sense to buy a car outright rather than financing your vehicle with a loan. Now you know how to finance a car in Missoula, check out these tips for becoming a smart and safe driver.