Whether you are looking for a used vehicle to replace one that has gone to the great scrap heap in the sky, are buying your first ever car, or are simply after a brand new model complete with the new 14 number plate, buying a car is not cheap. If you have to buy a new car through necessity, then it’s unlikely that you will have enough cash saved for the total value of the vehicle up front. A car is one of the most expensive things you will ever buy, for most this is second only to a house, so financing it needs to be looked at very carefully and all options explored.
Hire purchase, or HP, is most commonly available when buying a new car as opposed to second hand, and many dealerships now offer this type of finance as standard. You typically put down around a 10% deposit for the vehicle, and set up a payment plan of between 12 to 60 months to repay the remaining balance. The interest rate and terms are set by the dealership, and comparison between different dealers will help you get the best rates. The car will not belong to you until the final repayment is made, and any missed payments could mean the repossession of the vehicle.
If you intend to change your car again in a few years, or would simply rather not have the hassle of servicing and maintenance costs for your vehicle, then leasing is probably the best option for you. Whilst you never own the car you are driving, you are free to use it as you like within mileage restrictions, and you will have no surprise bills or fees to pay, as it is all included. At the end of your payment term you are expected to hand the car back and are usually given the option of starting over with a newer model.
Those who wish to shop around a little further for finance for their vehicle will need to look beyond the options given by the dealership. A personal loan is a popular way of funding a new car, as you can choose the amount and length of your finance. This is also an easier option for those with a less than perfect credit history as you can assess loans you apply for in terms of predicted acceptance.Read a Loans Direct UK review now, and see if they are the best starting point on your search for personal finance matched to your circumstances. It is best to look at unsecured loans for financing a purchase of a car, as secured finance puts your home at risk should you fall behind or miss a payment, so keeping it separate is preferable.
Buying a new car should be a pleasant experience, but the large cost involved can sometimes make it more stressful than pleasurable. Ensuring you have the right deal on finance, and that you can afford the repayments takes some of the strain out of this purchase, leaving you free to enjoy your new car for years to come.