The Options You Have When Buying A Car

The Options You Have When Buying A Car

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downloadThere is no one single way of buying a car. There are plenty of options and all depending on your preferences and your budget. I want to explain the options to you so you can get an idea of which way you can go considering your situation.

Use you cash or save it?

Putting your money into a savings account could lead to you earning a reasonable amount of interest in the long run. However, if interest rates in the market are low, you will be better off using that money to fund some of the cost of the car you want to buy. You could make a bigger deposit for your car so that you can save on interest fees. Of course you will have to make sure that you will leave some emergency money that you will badly need in case something bad happens.

Personal Loans

You can get an unsecured personal loan to get the cash you need to buy a car of your choice. Since this is a personal loan, it might take a while to process and have the funds but the application process is pretty easy and straightforward. However, depending on your credit rating, you might not be able to get the whole amount you need for the car you want. If you are willing to work on finding a car within that budget range you are approved for, then this should be no problem. But if you think you deserve a better deal that what you are getting, be very careful because this application may have already have a hit on your credit, which will affect future borrowings and which might actually lead to even lower credit.

Hire Purchase

Hire purchase is like renting a car until you have paid enough rent to own it. This is pretty quick and very easy to arrange but it requires at least 10% deposit. You will have flexible term for your repayment and you can find very low rates. One thing you must understand though is that you do not own the car until the last repayment is made so you won’t be able to legally sell the car if you feel like doing so.

Personal Contract Plan

This is almost the same as the hire purchase but you have different options at the end of the term. You can return the car, trade the car in for a better model or keep the car. You can get lower monthly repayments but you will be limited to use the car only within the certain mileage agreement. Also, if you want to keep the car at the end of the term, you would have to make a balloon payment so it’s much like you would need to keep the money you save from lower monthly repayments and put it into a savings account to use later to pay off the car or add deposit for a trade in.

Personal Leasing

The thing about personal leasing is that you are basically just renting a car. It will never be yours and you will end up paying for the extra mileage that goes beyond the limit you and the dealer agreed on. You do however get a flexible term, which could range from 12 to 36 months and you also don’t have to worry about depreciation in your vehicle’s value.

So there we are with the options you have. I have just provided you with a summary but I trust that you will keep on researching for the best option for you. Remember that a car loan is no laughing matter and if you want to make sure that you are ready for a long term commitment like this, you have to really think about all the factors from your end and from your car loan provider’s end. Shop around and compare and do not ever make a decision in a rush. If the car loan provider is pressuring you to agree to something you are not sure of, run away!

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