Not all of us are able to buy a car outright, but fortunately it’s possible to benefit from various finance options on a car even if credit histories aren’t perfect.
One of the most popular ways to arrange car finance deals involves hire purchase. You can expect to pay between 7% and 13% APR when you buy a car in this manner. You’ll usually pay a deposit at the start of the deal, which is generally a tenth of the price of the car – you may also incur an admin fee at this point. After this, you’ll be paying for the remainder of the car in monthly instalments before making a final additional payment alongside the last instalment. It is worth remembering that you don’t become the legal owner of the car until the contract is finished – so you will neither be able to sell the car nor make any modifications to it.
If you’re not interested in owning the car, but like to upgrade your vehicle regularly, leasing could be your best option. The monthly payment that you will make will depend on the model itself as well as your general annual mileage, and you’ll be able to choose how long you want to lease it for. You will usually have to pay for a couple of months’ worth of rental in advance. Personal contract plans are also popular in the world of car finance deals and involve lower repayments than you might find elsewhere. You’ll start the contract with a deposit and make monthly payments before paying off a lump sum at the end. You’ll be able to either pay this yourself or sell the car to fund this payment – or you could simply hand the car back if you wish without paying this sum.
Looking at your budget and lifestyle
It’s always a good idea to shop around and take your time before deciding upon anything. As you’ll be entering into a fairly long-term contract, you should spend time considering your options and your budget before signing up for anything. Many drivers have found car finance deals to be of exceptional value and support.