This article will explain all the nitty-gritty of car finance and financing. To some people, this may sound as a daunting task, but it is simply a two-way process.
The first stage is determining the kind of car deal that would be suitable for you. It could be any of the following:
- Personal Loan
- Hire purchase
In this case, all you need to do is to select a provider that would be suitable for you.
Personal loan and car allowances
To the best our knowledge this appears to be the most popular way of car financing option. In a recent survey conducted, majority of people favours this method.
Borrowing money from a financial institution like bank, other financial lenders or building society gives you the privilege of owing a car. To know the best or suitable money lenders, you would have to check multiple websites.
If you wish to collect a loan, it is advisable to go for a longer monthly periods, this means that you will not been paying smaller amount of payments any and the amount you are borrowing. If you have been confirmed credit-worthy, then you can take
as many as you want. The 1ALP car allowance website provides more useful information on this topic.
Experts advise that you can go for a personal loan, if your answer to one or two of the following is in the affirmative:
- You don’t really have enough deposit for car finance
- You wish to own the car outright
- You wish to keep the car for sometime
This is another simplest way of owing a car besides collecting a bank loan. In this case, the borrower is expected to make some deposit maybe 10% to 15% of the total sum, followed by fixed monthly payments. It is important to note at this stage that
the car belongs to the hire purchase company until the borrower has made final payments.
Till the final payment is made, the borrower has no legal right to sell the car. You can go for hire purchase if your answer to one or more of these is in the affirmative sense:
- You want to own the car at the end of the day
- Your circumstances and budgets permits fixed monthly payments
- Your disposal income would decrease for a period of time
- You want low-risk credit to be secured for the car
- You are very much aware that the car doesn’t belong to you till you have repaid all the outstanding debts
Car lease options
This is also known as personal contract hire. According to research, it is one of the most vital car financing options. In this case, the borrower is renting a car for some weeks or months or years as the case maybe.
There is no agreement that the car would belong to you at the end of the day. When the contract exhausts, you will hand the car keys to the real owner. The payment you made covers only the vehicle’s depreciative value. This car lease website provides a comprehensive explanation.
Within the period of the usage, you would be responsible for fixing it, while repaying too, you are expected to pay a very small amount.