Car Finance - page 2

Funding a new car

Some other methods of paying for a car

Personal contract purchase is a popular option. Dealerships will commonly offer the option for you to pay a deposit on your chosen new car and then make monthly repayments on part of the balance, normally over three years. At the end of this time, you can either pay the balance in full and keep the vehicle or return the car without any further payment. You may decide to trade the car in a start another contract.

Car News
New car models that may tempt you to part with your cash

The plans are very flexible and you have some choice in the amount of the deposit and payment amounts. Rates vary between dealerships, so make sure you check out the overall amount you'll be paying out over the term. Because the monthly payment should be lower than on a personal loan, due to interest being paid on a lower portion of the value of the car, this may suit people who need to keep their payments down.

Another option would be simple hire purchase. The loan would be secured on the car. The car becomes the property of the finance company until the end of the loan term, when the final payment is made and ownership passes to you. Normally either a ten per cent deposit is required, or a vehicle is traded in part exchange to form the deposit. Interest rates vary and can be very competitive, particularly if you have a good credit record.

Whatever you decide, have your facts and figures to hand when you reach the stage of ordering your car - then you'll know you have the best deal. And don't by swayed by persuasive salespeople to do something you do want to. If you're spending lots of money on a car makes sure it's one you really want.

Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. Security by way of a charge on your home may be required. Think carefully before securing other debts against your home.

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