A large number of car finance companies are present all over the world who provide car finance or car loans to customers for buying their choice of car. A variety of banks and non banking financial companies (NBFCs) also function as car finance companies.
Car finance companies offer car loans both for new cars and old cars. People who want to buy a new car but do not have sufficient money can do it with the help of car finance companies. Car finance companies also offer exchange options in which the old car can be exchanged with the new car and the depreciated value of the old car is deducted from the new car's price. A lot of information about car finance rates is available from banks and financial institutions working as car finance companies over the internet or online.
Car finance can be availed either singly or jointly (in case of more than one persons seeking car finance). While more than one individual is applying for car finance, they are known as co-applicants. Usually, there is no requirement of a guarantor for a car finance loan, however, if an individual's income is lower than the credit criteria, then he should bring a guarantor for getting the loan.
Different costs that are involved in car finance include interest costs and processing fees. The amount of interest is calculated in two methods. One is the flat rate method and the other is the reducing balance method (written down value method).
The criteria for car financing differs from one car finance company to another.
Car finance companies usually offer the following schemes for financing a car:
- Margin Money Schemes
- Hire Purchase & Lease EMI
- Advance EMI Schemes
- Processing Fees
- DSA/DMAs vs Dealer
- Security Deposit Schemes
The leading car finance companies include the following:
- HSBC
- Capital One
- CitiFinancial
- ICICI Bank
- Toyota Finance
- Direct Line
- Wells Fargo
- Honda Car Finance
- Hyundai Motor Finance Company
- Volvo Car Finance
In the United States, CarsDirect is considered as the top car buying site. Nowadays with the advent of internet, the process of getting a car finance loan has become quite easy and the popularity of car finance companies is increasing by leaps and bounds.