For a family on a budget, purchasing a new or used car will be an incredibly stressful and daunting prospect. However, it is possible to find the car you are looking for and find an affordable way to finance the purchase. This is through a few affordable vehicle finance options – here is everything you need to know about each method.
Instead of borrowing money from a bank or separate loan provider, you can finance your next car through the dealership. This is often the best way to fund the purchase, as dealers have access to finance products that are unavailable elsewhere; this often enables you to buy a more expensive car, arrange lower repayments or arrange a shorter agreement.
You can also customise your agreement to suit your needs and the interest rate will be fixed, unlike other forms of credit. Additionally, the finance is secured against the vehicle and not your home. The process is usually quick and easy, and reputable businesses like Imperial Cars can handle all of the paperwork for you.
PCP (Personal Contract Purchase)
As an alternative, PCP is another way to finance a car. You will get lower repayments than a regular loan as the future value of the vehicle is calculated and treated as the final payment. In addition to this, you can settle at any time you wish and there are 3 options at the end of the agreement. You can pay the final payment and keep the car, or return it with nothing to pay if it is not worth the amount of the final payment. Finally, you can part exchange the car and settle the agreement. Excess over and above the final payment can then be used towards your next deposit. These factors have made PCP an increasingly popular vehicle finance option.
Hire Purchase (HP)
This traditional option allows you to settle at any time and you will receive a rebate of interest. Other benefits are that it is fast to arrange, with decisions being made within minutes. You also get quick delivery of your vehicle and there is no risk to your property; this is because the car acts as the security and not your home.
These are the three vehicle finance options, all of which can make purchasing a new car much more affordable. With a little research and comparing deals, you should be able to find the perfect car and a great deal.