Reasons Why You Should Choose Car Loans to Fund Your New Car Purchase
Buying a car is a major financial decision, and it requires strategic financial planning. By financing a car with a loan, you can distribute the expense over a period and preserve your savings. Financing through a loan not only contributes to establishing a favourable credit history but also allows you to benefit from low interest rates.
Below is a list of the reasons why choosing a Car Loan to fund your new car purchase could be a wise decision.
The Benefits of Financing a Car: The Right Choice for You
Financing a car can make owning your ideal vehicle more achievable and manageable. Other benefits you can enjoy with a Car Loan include:
- Lower Upfront Expenses
Rather than draining your savings with a hefty lump sum payment, financing your car lets you divide the total cost into affordable monthly instalments. This approach is beneficial for those who might lack enough cash available or who choose to preserve their savings.
By getting a Car Loan, you can save money for other essential expenses. Financing a car not only keeps your cash flow more balanced but also gives you the flexibility to navigate life’s uncertainties.
- More Choices to Choose From
This financing provides you access to a larger pool of vehicles to choose from. You can also choose cars, which could be a little out of your budget. A Car Loan gives you the flexibility to go beyond your decided amount for the car purchase and look for the latest and new options in the market.
New cars come with new safety technologies, such as advanced driver-assistance systems, better crash-test ratings, and improved performance capabilities. A more comprehensive range gives you more options for a car that fits your lifestyle and preferences.
- Build a Positive Credit History
Another important advantage of financing your car is that it creates a good credit report. Credit history is imperative for later financial activities; it ensures that you will be eligible for mortgages as well as loans in future with attractive interest rates. Financing the car and paying EMIs on schedule shows that one can manage and pay debt responsibly.
This can be extremely helpful if you are merely starting to set up your credit or need to improve on a low credit score.
- Benefit from Lower Interest Rates
Buyers can benefit from competitive interest rates on Car Loans by lowering the total repayment amount. Securing a lower rate can also free up funds for other financial needs. It’s advisable to negotiate with your lender for the best rate possible. To estimate monthly repayments and understand how interest rates affect your loan cost, try using ICICI Bank’s Car Loan EMI Calculator before applying for a Car Loan.
- Ability to Finance 100% of Purchase Amount
Financing allows you the benefit of borrowing the complete purchase amount of the car. This proves very effective for those who cannot provide a down payment.
- Avail Tax Benefits
In India, cars are seen as luxury items. Therefore, individuals purchasing a car for personal use are not eligible for any tax deductions on their car loans.
However, if you buy a car for business purposes, you can deduct the interest paid on the loan from your taxable income. It is important to remember that only the interest portion is eligible for deduction, not the principal amount.
Conclusion
Getting a Car Loan offers several benefits, including minimising the immediate financial burden, allowing for greater flexibility, enhancing credit history, and potentially providing tax advantages for business-related use. By retaining cash for other needs, you can make a more strategic and financially prudent decision when acquiring your vehicle.
For those seeking to enhance their financial freedom while obtaining a dependable vehicle, financing a Car Loan from leading Banks like ICICI Bank is an excellent choice. A Car Loan can assist you in acquiring a family car, a business vehicle, or a personal automobile, allowing you to do so without putting significant pressure on your finances.
The post Reasons Why You Should Choose Car Loans to Fund Your New Car Purchase first appeared on Motoroids.