At the end of the car model year, what source of financing for a new car would probably have the best terms?

a. a collateral loan from a bank

b. a collateral loan from the car company

c. a home equity loan

d. revolving credit line

1 answer

At the end of the car model year, the best source of financing for a new car would likely be b. a collateral loan from the car company.

Car manufacturers often provide attractive financing deals, such as low-interest or even 0% APR loans, to help sell off their inventory of models from the previous year. These promotions are designed to incentivize buyers to purchase new cars during this time, making financing through the car company a favorable option compared to other sources.

While other options like a home equity loan could potentially offer low interest rates as well, the terms and incentives associated with a loan from the car company are typically more competitive during this period.