The road to car has never been easier; Despite the shortage of new vehicles and much thanks to the excellent loans and terms that car companies offer their customers, buying a car has now become an accessible, convenient and efficient matter for many customers.
The Corona epidemic created a real shortage of new vehicles and spare parts for vehicles: the global chip crisis and the lack of manpower greatly slowed down the production of all types of vehicles. At the same time, following the plague, people also froze on the yeast and recalculated an economic trajectory, which together led to a critical drop in the automotive industry in Israel. Immediately afterwards when the recovery and exit from the crisis began, the purchasing power of the majority of the public increased, its equity (in general) increased, and the demand for new vehicles increased significantly. On the other hand, the low supply opened up a large gap that translated very quickly into rising prices, and when prices on new models rise – all prices in the industry rise: both on used vehicles from car dealerships and from private hands.
As far as the characteristics of the deals, the types of loans and the terms offered to the buyers of the vehicles are concerned – the competition between the various companies has intensified and accordingly, the purchase itself has become more worthwhile and worthwhile for the customers.
Economic order
New car, used, fully funded, trade in, Private leasing, Or operational are just some of the car purchase deals. On the face of it this seems confusing, but the bottom line, what is important to know is the main differences between the deals, how much the vehicle will cost you in the end, and how the conditions work out for you personally.
Let’s start with leasing. This method of financing was developed primarily for the business vehicle market, with an emphasis on companies with vehicle fleets. This is a 36-month financing transaction, in which the car agency provides a new model for the customer for a fixed monthly payment spread over 3 years, when at the end of the period 3 options are opened for the customer: returning the vehicle to the agency and terminating the transaction. Purchase of the vehicle by the customer on preferential terms and at an attractive price. Originally, leasing was operational and the payment also included the costs of treatments, car insurance, licenses and even fuel. Over the years, the great success of the method has evolved and led to a significant increase in vehicle delivery. The vehicles that came out of the round came to the car lots and opened up the category of used car leasing. As supply increased, car companies realized the opportunity created and also created the private leasing, which allows financing on very similar terms to the private market, without incorporating the costs associated with the car.
Like business, the private sector has the option to include operating leasing expenses, but the monthly payment jumps up and it is very important to check the viability. In addition, even in this case the customer receives the three terms of completion of the transaction and there are also transactions for 18 and 24 months, which is a substantial and convenient advantage in itself. Also, in private leasing there is a large selection of vehicles and models, from new to used, which can be priced differently according to mileage, equipment and other criteria that can ultimately facilitate the customer financially; The financing itself can vary depending on your requirement, the type of vehicle you request and of course your repayment ability. Usually when it comes to a private leasing transaction, it is customary to pay an advance of a few thousand shekels and then set a monthly payment for the number of months of the transaction. In many cases, as part of the competition and flexibility of conditions, it is also possible to receive full financing for the car today, without paying a down payment. The main difference between a leasing transaction and a regular sale transaction is that in a normal sale the full payment for the vehicle is divided into payments in one layout or another, and the leasing transaction is limited in a specified time.
In non-leasing purchase transactions, there are different loans: the most common of which is Balloon loan: Such that combines a down payment, a relatively low monthly payment for a period of more or less 36 months, and at the end of the period payment of the balance in full. In fact, the leasing method is more accessible and common than regular transactions, but in any case it is important to check the various options and compare the terms, interest rates and the total consideration you receive in each transaction.
Not for the first time
Another deal that may be relevant to you is “Trade In”; If you have a car that you plan to replace with a new or more adapted one – many companies will offer you the option of a trade-in. That is, a replacement deal in which you sell the old vehicle to the agency and in return, receive a discount on the value given to you on the new vehicle. Of course, you can also sell the car privately, and maybe even get a higher amount for it, but unlike trade-in, it is a process that takes time and in the end is also more complex due to the various factors and the surrounding bureaucracy.
In conclusion, buying a car is an important and not cheap move and therefore, when you approach such a move, it is advisable to deeply understand the variety of options before us and make a comparison between them, so that we will eventually purchase the car that suits us and our needs.