A car is one of the major purchases you will make in life. Cars are essential for the day to day commute, but they can break the bank. If you are considering buying a new car, you should be prepared to spend at least £7,000. Thankfully, there are many financing options when it comes to buying a new or used car. Examples include
Paying in Cash
If you have some savings, you can pay for your car partly or fully in cash. The key benefit of buying in cash is that you won’t spend any money on interest and other loan expenses. Another benefit is that some dealers may give you a good discount when you pay in cash. Therefore, you will end up spending less on your car purchase. However, you should be careful not to put all your savings on car purchase especially if you rely on your savings account to pay some bills. Also, if your savings are not enough to buy the car of your dreams, you can consider seeking finance elsewhere to avoid making a purchase you will regret later.
Car Loan
This is a loan given with your car as collateral. That means if you are unable to pay the loan, the lender can sell your car to recover their money. You can easily find car loan lenders online. With online lenders, you simply make an application, get approval and use the approved amount to pay for your car. Some lenders may direct you to their preferred car dealers or you may be given the option of finding your own dealer. When applying for a car loan, pay close attention to the interest rates and the payment terms. You don’t have to settle with the first lender you find online. Compare offers from a number of lenders before making your final decision. Credit brokers such as Auto Finance Online make the search for online lenders easy. Once you have a lender, make sure you scrutinise them well before signing an agreement with them.
Personal Loans
The other option you have is to get a personal loan from the bank and other lenders. The loan can be secured or unsecured. The secured ones tend to be cheaper but they put you at risk of losing your property if you are unable to pay. You can get a personal loan to top up your savings or finance the whole purchase.
Car Hire Purchase
This is another option for those who don’t have enough money to pay for a car in cash. The agreement is usually between the dealer and the buyer. You simply make a deposit, get the car you want and pay for it in monthly instalments. The final contract for your ownership is completed once you have cleared the agreed amount. Before you take such a deal from any dealer, take time to go through the terms and know the total cost. A deal is worth considering if the interest rates are reasonable and payment terms are ideal for you. For all deals that involve borrowing, have a solid plan on how you are going to make payments. This is because if you can’t afford the monthly payments, your car or other assets given as security will be sold and you will end up losing a lot.