There are several types of finance that you can acquire when looking for money to help you move forward with a purchase or change of life in some way. From personal loans to short-term payday loans to help you plug a short-term financial gap, there is plenty of assistance out there from reputable lenders. There is one area of finance solutions that is often overlooked and that is the process behind acquiring finance for a car. If you are in the market for a loan to cover the cost of a brand new car, you’ll be looking at a few different options and it is important that you make the correct choice for you – in terms of right now, but also in terms of your future self, as you pay off the car finance loan.
A car finance loan is one that you take out with the specific intention of using that money to buy a car. It is a great way to purchase the car that you want or need right now, but instead of having to pay the cost in full right away you can spread the cost of the payments over several months or years. You will have to factor in any charges relating to the car loan, as well as the specific interest rates and length of payment, but before committing to any car finance loan it is important you have the full figure in front of you outlining the exact amount that you can expect to pay over the terms of repayment.
Car finance is usually found in three different forms. The first of which is through a personal loan. This is where you take out an unsecured personal loan, which allows you to borrow the amount of money that you require in order to purchase the car. This is spread over a set period of time, with repayments made monthly. You would own the car as soon as you leave the dealership, allowing you the flexibility to sell the car if you would need to in the future.
Another option is through a hire purchase, where you make monthly payments towards a car finance company – in turn that company hire the car to you. Once the final payment has been made the ownership of the car shifts to you. You would be expected to put down a deposit in most cases (usually around 10% of the overall value of the car).
The third option is that of a personal contract purchase, which is similar to a hire purchase with a deposit put down and monthly repayments, but you are paying off the value of the cars depreciation at the end of the contract, and at the end of the contract you have the choice to pay off the rest of the car, return the car, or get another car with a personal contract purchase.
Whichever type of car finance you use to purchase a car be sure to go with the type that makes most sense to you.