4 Ways to Finance Buying a Car

Buying a car is a huge financial decision. It is important that you have sufficient finances to support the purchase otherwise it will put an unnecessary burden on the finances. If you think it is the right time to buy a car then you need to figure out the best financial way to make the purchase.

Make sure that you explore all the potential options so that you can find the one that is best suited for your financial situation. Here are just a few options that are on the table.

A personal loan:

There is an option of getting a personal loan from the bank, finance provider or building society if your credit rating is not good. The loan allows you to spread the cost across years so that it does not put too much pressure on your financial situation.

When you get a loan you need to make sure that you do not take it against your home because you would not want to risk it. It is usually the cheapest and convenient alternative to get quick cash as it can be arranged on the phone or the internet. The monthly cost can be high but by shopping around you can find a loan that comes with a competitive fixed interest rate. It will make it easier to pay back the loan.

Hire purchase:

If you choose to hire purchase then you will be getting a loan that is secured against the car. Hire purchase requires a deposit of about 10 % and then you will have to make fixed monthly payments. The payments need to be made over a specific time period. You will have full ownership of the car once the last payment is made. The hire purchase agreements are often arranged by the car dealers. You can take some time to search the market and you will be able to find great new car finance deals Hyde.

Hire purchase is a quick and easy way to get the required cash for the car. You also get to enjoy flexible repayment terms as they can be stretched from twelve to sixty months. It also offers competitive fixed interest rates. If you are looking for a short-term agreement then it can be an expensive financing option.

Personal contract purchase:

PCP or personal contract purchase is similar to the hire purchase but it is a better option for people looking for lower monthly payments. It is important to understand that the total amount of money you pay will be higher despite low monthly payments.

In a PCP loan, you will not be getting a loan for the complete cost of the car. It offers a loan for the difference between the price of a new car and its predicted value at the end of the agreement. When the agreement ends you have the option to trade the car in and start again or you can simply hand back the car to the dealer and make no payment. You can also pay the final payment that is equivalent to the resale price of the car and you will get to keep it.

Buy with credit card:

Paying for the car with a credit card offers extra protection to the investment. You can use the credit to make complete payment or a part of it. You just need to make a certain payment and you need to meet the monthly card payments. There are certain dealers that charge a handling fee. Before you decide to use a credit card make sure that your dealer accepts it because not all dealers do.