Thinking of Buying Cars on Finance? Top Tips to Get You Started
Many people consider buying cars on finance. This can be an effective way for those with tight budgets to afford a new vehicle or second car for their family.
Many people consider buying cars on finance. This can be an effective way for those with tight budgets to afford a new vehicle or second car for their family.
Spreading the Costs
When you choose to purchase cars on finance you will be able to spread the costs of the new vehicle over a period of time. This means there is no need for you to struggle to find the money upfront or spend a long time saving up for your new car. With car loans you will be able to get access to the funds you need quickly and hassle free.
If you are new to the car finance market then here are a few top tips to help you get started.
1. Research the Best Products for You
There are some different types of car loans available on the market. You do need to do some research before you get quotes so that you understand which products would best suit your budget and circumstances. Some common ways to buy cars on finance include:
Hire Purchase (HP) a straightforward loan in which you would borrow the amount of money you need to purchase your new car and pay it back monthly plus interest. Most HP agreements will require an initial deposit (up to 1/10 of the cars market value).
Lease Purchase (LP) this car loan offers lower monthly repayments in return for an initial deposit and a final balloon payment
2. Look at the Market
Take a look at the current car market and see what is available. You may already know what kind of car you would like so you can focus your market search and compare prices. This will give you a better idea of how much money you would need to borrow if buying cars on finance.
Also look at what offers dealers can provide. You may get some great extras such as extended warrantees from some dealers that would provide you with more for your money when buying new cars on finance.
3. Compare Interest Rates and Loan Terms
Most people understand that they need to look at the interest rate (APR) advertised on car loan products. However you also need to check the loan term as well. This will tell you how long you will be paying off the loan and it is important this suits your circumstances. For example you may prefer to opt for a slightly higher interest rate if you can have a shorter loan term. It may benefit your finances to pay a bit more each month in order to get the loan paid off more quickly.
Before you consider purchasing cars on finance you do need to do your homework. Make certain you have researched the market and understand how to get the most for your money.
