Quote:
Originally Posted by tofu1413
hmm.. so it is recommended to loan it as a personal loan to buy an used car rather than loaning as a "car loan"..?
im having a similar situation on my mind right now too.. the car isnt to expensive ($6000 or so )
so fees (500), taxes (600+) so i should lend out about 7k as a personal loan..?
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Certain banks offer a "car loan" and what they do is put a lein on the vehicle, meaning if something happens, for example, job loss or you decided to just take off one day, the bank will reposes the vehicle. They will ask for registration papers to make sure they have the VIN anad also, prior to the loan being approved, there is a team of analysts who will do market and risk research on the vehicle prior to approving the loan.
If for example, the OP changes his mind and wants to buy a 1989 Civic DX for $24,000 (this is a very unrealistic and exaggerated example) the bank is likely going to say no to you. However in the OP's case, they will see that he wants an 06 Acura TL and the market rate is about $26K, they will also factor in the term of your loan and consider things like repairs/maintenance and depreciation. Banks like to protect themselves too.
Edit: Don't forget that there's interest too.