Banks are now considered as one of the essential part for the development of a country’s economy. They provide different kinds of services in order to facilitate their customers and to live their life in a better way. Credit car financing is one of the important services which almost all the banks and many companies offer to their customers. Credit finance means to give money as a loan and charge reasonable interest on the amount lent.
There are two types of credit financing.
1. Finance leasing: - It means to lend money for long term bases. According to this lease the asset acquired is used by the lessee and the lessor has no interest to acquire it back. The only interest of lessor is the principal amount borrowed and the interest charged on it. The amount is to be paid in a number of installments which may cover more than 5 years or more. If a person wants to buy a car and he is shorter of money than Credit ar finance leasing is the best option for him.
credit car finance has many advantages. One of the great advantage of it is the cost of the asset is spread in a number of installments and because of which per months installment become easily affordable for the average families. Another advantage of Credit car financing is that a person can have modern and luxurious car and if this service had not been introduced by the companies than the dream would remain dream for the average families.
On the other hand it also has some disadvantages. A major demerit is that the car becomes expensive in the long run. As we have to pay a number of installments every month in any way otherwise we will not have a car with us. Furthermore we have to bear car’s expenses whenever we use it.
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2. Operating Lease: - It is a lease whose term is comparatively smaller than that of a finance lease. The duration of this lease is for a few months or for 1 or 2 years.
It also got some advantages and disadvantages. One of the great advantages of it is that the poor people, by using this system, can use the Cars. But the disadvantage is that since the property belongs to the lesser therefore he can take the delivery back at any time.
With the facility of credit car finance the greed in the mind of people can be removed.
The persons dealing with credit car finance normally deals in such a way that facilitate the world at large and by giving various choices enabling almost all the people to get the possession of the car in the manner they want. Because in this way both the persons have an advantage in the sense that the lessor is getting money and the lessee is enjoying with the car. And when the person has the car he will be happy. This system is spreading very fast in the whole world and giving positive feedback. As the world is growing this method of car financing is getting improved day by day which is helpful for everyone.