If you need a new ride but don’t have the funds yourself then you should consider buying a car on finance. There are many great finance deals available these days that can offer a cost effective way to buy your next car.
You will have plenty of choice when it comes to buying a car on finance. There are many lenders out there offering different types of finance deals. You can choose from options such as:
– Dealer Finance – dealers can offer competitive rates on finance products direct from the showroom. These are provided by some of the big lenders and will offer a quick and easy way to fund your next car purchase. Products can include Hire Purchase (HP) and Personal Contract Purchase plans (PCP).
– Personal Loans – Consumers could be eligible to borrow between £1,000 and £25,000 through personal loans to buy a car on finance, although this could be more difficult to obtain nowadays. These loans are offered by major lenders such as banks and building societies. When you take out a personal loan the cash will be transferred to your account. This is a good option if you need cash to buy your new car from a private seller.
– Mortgage Top Up – if you have a mortgage then many lenders will offer you the opportunity to borrow some more money to extend your mortgage. This can be a good way to buy a car on finance if you are on a very tight budget. You will be paying off the money over a longer period of time. This means the monthly repayments on your mortgage will only rise by a small amount which should not strain your finances too much. However remember adding money to your mortgage can mean it takes you longer to pay this large debt off, as well as potential interest rate rises
Before You Sign
If you are considering buying a new car on finance then you do need to think carefully before you agree a deal. Taking out a credit product to buy a new car can be a big financial commitment. It is important that you have considered the following points before you buy a car on finance:
– Lender Reputation – the finance market is vast and not all lenders are equal. Make sure you are dealing only with reputable lenders who can offer fair lending terms.
– Repayment Schedule – check the repayment schedule carefully. Make sure you can afford the monthly repayment amounts and that they are due each month on a convenient date.
– Overpayments – making overpayments can help to pay the finance deal off more quickly and reduce the amount of interest you pay. However you will have to check that overpayment are allowable under the deal. Many finance products will charge a fee for overpayments which means you will not be saving any money by paying off the deal more quickly.