Everything You Need To Know About Cars On Finance

Whether you are looking to by a new car this year or you are just looking at your options, it can seem daunting to find a car at an affordable price, particularly if you are looking to by new. But with a number of finance options on offer from some of the world’s leading manufactures, it doesn’t have to be impossible. Whether you are looking for the latest car from Nissan using a Nissan finance option or you are looking to rent a car from Vauxhall, each of these manufacturers offer affordable options to cater to their clientele.  In this article, we will be providing you with more information into some of the key elements you need to know about your car. 

What Is Car Finance?

Buying a car can be an expensive process that many of us cannot afford during a time of financial uncertainty and with the need for a car slowly increasing, alternative finance options are becoming a more popular option for those that are looking to buy a car. With a number of dealerships offering finance options as a way to drive sales, this has become the norm for many that are looking to purchase a car quickly. 

Personal Contract Purchase finance options 

Though car finance has become very popular in recent years, there are a number of different types of finance option that may be better suited to you. One of the more popular options on the list is personal contract purchase. This finance option is one of the most popular as you do not make repayments on the full value of your car, this, therefore, means that monthly repayments are significantly lower than other forms of finance, making this the more affordable option. 

Though the monthly repayments are often times lower than other forms of finance, it is important to note that there is a balloon payment at the end of your contact as well as the option to purchase fee that you need to pay if you want to own the car. The balloon payment is decided by the lender and is the value of the vehicle at the ends of the financial term based on the mileage and the age of the car. 

Hire Purchase Finance 

Another option for some when purchasing a car is the hire purchase form of finance. This is different from a PCP as you are not required to stick within a pre-agreed mileage and there is no balloon payment at the end of the financial term. This contract involves you hiring the car over a prolonged period of time and playing monthly instalments over an agreed period. This is better for those on a restricted budget as the option to purchase the car just involves paying off the final payment and the option to purchase fee, this, therefore, prevents you from forking out a large sum of money as a result. 

Personal Contract Hire 

Unlike PCP and HP finance options the use of a personal contract hire agreement does not give you the option of owning the car at the end of your contracted term. With this style of contract, MOT, insurance, tax and maintenance costs are often included in the monthly repayments, however, the deposit that you initially paid to rent the vehicle will not be repaid. Though this may seem like a simple way of renting a car, this has the potential to work out as the more expensive option as the monthly repayments are oftentimes significantly higher than other forms of alternative finance. 

With this in mind, there are a number of finance options for you to choose from, allowing you access to your dream car in a way that does not overextend your budget. Will you be getting a new car using one of these finance options this new year?