A personal loan from a bank may be an option for you if you know you want to keep the Mercedes-Benz and want a specific payment to budget for every month. For example, if you are a homeowner, a home equity loan is a potential alternative to a car loan. In fact, according to the loan professionals at BB&T, “home equity loans and lines of credit carry lower interest rates than typical auto loans and can be repaid over a longer term.” All this to say that you should compare loans from different lenders before committing to a personal loan.
Financing a new car is a big financial decision. If you’re looking to buy a more high-end model, such as a Mercedes-Benz, how you finance the purchase is especially crucial.
You will pay more total interest on a car loan over the loan term for a Mercedes-Benz than you would for a less expensive car, so you’ll need to compare loans to get the best deal.
The first decision you need to make is what model of Mercedes-Benz to buy. Price ranges vary and the higher the price, the more you’ll pay for insurance coverage.
For example, the C-Sedan series starts at $34,800 brand-new, while an SLK-Class roadster model starts at $54,800. You must be able to cover the loan costs and the insurance premiums for the model you choose.
Once you’ve decided which Mercedes-Benz model meets your driving needs and your budget, you’ll have to look at your financing choices. Compare loans from different sources to get the most affordable financing package.
Loan or Personal Contract Purchase
With a personal contract purchase arranged through the dealer, you pay off part of the cost of the Mercedes-Benz over a period of time, such as four years. You pay the rest at the end of the period in a lump sum or trade the Mercedes-Benz for a newer model. However, the sale price is fixed in personal contracts, so you can’t negotiate with the dealer.
A loan purchase, also done through the dealer, allows you to finance your loan through the Mercedes-Benz dealer arrangement. You’ll need a deposit in most cases and the interest may be high. Compare loans from different dealers if you want to use a loan purchase to buy your Mercedes-Benz.
Hire purchase allows you to “hire” the Mercedes-Benz from the dealer. You may need a deposit and to have a monthly payment plan that’s subject to review when about half the sale price balance is paid off.
One advantage is that you can decide to not buy the car once the payment plan is under review, but you may be charged for any minor damage to the car if you do walk away.
Personal Loan or Credit Card
A personal loan from a bank may be an option for you if you know you want to keep the Mercedes-Benz and want a specific payment to budget for every month. Compare loans from different lenders before committing to a personal loan.
A credit card with a high limit is another way to finance a Mercedes-Benz purchase, but if the card has a high interest rate, it will be a costly choice. If you’re using a card with a special introductory interest rate, make sure you check the terms of the agreement. Once you pass out of the low introductory rate, your interest rate may be too high for the car purchase.