If you’ve ever purchased a car before, new or pre-owned, you might have noticed that there are numerous options of payment available that seem to be beneficial in saving both your money and time, and ease the strenuous process too, of course – the most common option being a finance agreement! We’ve put together a guide on how to buy a car on finance, just to make sure you get a fair deal when you buy a new or pre-owned car.
WHAT YOU NEED TO KNOW
Before you even consider buying a new or pre-owned car on finance, you should consider your current situation and decide what your best option is – would you benefit more from leasing a car, or by using a bank loan to secure your car from day one? Finance agreements such as Personal Contract Purchase and Personal Contract Hire are both leasing options whereby you don’t completely own the car until the final payment has been made by yourself, or there’s also the option to hand the car back after covering all of the monthly instalments – meaning that it’s no longer your responsibility to make the monthly payments and somebody else can purchase the car while you look for one that better suits your lifestyle and financial situation.
WHAT ARE YOUR OPTIONS?
If you’ve never bought a car on finance before, the terms can become quite complex and can often make the process a little daunting. But, rest assured that there a few options available for you when looking to buy a new or pre-owned car on finance – Personal Contract Purchase, Hire Purchase and Personal Contract Hire which is otherwise known as leasing a vehicle.
Personal Contract Purchase is a more flexible finance option compared to the other aforementioned agreements and is usually available for both new and pre-owned cars, with affordable and fixed monthly instalments. Once the agreement has ended, you can hand the car back, purchase it through a final payment or trade it for another which makes it easier to upgrade your car on a regular basis.
Hire Purchase is a finance option whereby the cost of purchasing a new or pre-owned car is spread out across a series of fixed monthly payments and once the agreement reaches its end, you have complete ownership of the car.
Leasing is a finance agreement that requires you to cover affordable, fixed monthly payments in order to hire the new or pre-owned car, however you have to return the car once the agreement has ended.
The three aforementioned finance agreements are typically the most common when buying a new or pre-owned car on finance. But, if you’re struggling to understand the terms of a finance agreement, don’t worry as there are plenty of finance experts who will explain the terms to you before you agree to a finance deal!
Photo Credit: Copyright 2018 Angel Mosqueda / Car Fanatics Blog