4 Finance Options When Buying A Car

finance options buying a car financing vehicle

When it comes to buying a car, there are many different ways you can finance the deal. Depending on your financial situation, there will be different options that best suit you, and each method has its positives and negatives. 

Buying a new car is generally the second most expensive purchase people make after their house, so it’s important to look at the right way to finance it. When you investigate your options, you may find the options you were considering will cost you more in the long run, so it’s always a good idea to look at all the options and choose the one that’s going to work out best for you. 

Here are four finance options you should look at when you’re purchasing a car. 

1. Upfront Outright Purchase 

The obvious first option is an outright purchase, where you pay for the car upfront and in full. This option means you don’t have to pay interest on a loan, and you own the car, allowing you to do with it what you want. 

On the downside, buying your car outright means investing a large amount of cash at one time, and many people don’t have this kind of money lying around. If you do, then you don’t have to worry about paying monthly installments, and all that is left to pay is the day-to-day costs of running your car and servicing it

2. Purchasing Using A Personal Loan 

If you want to own your car outright but don’t want to pay the full price upfront, then there’s always the option of using a personal loan to purchase your car. You can use your own money to buy the car and top it up with the amount you want to borrow. 

You can get specialist auto finance from companies like Auto Finance Online, helping you to buy your car outright and pay back the money over a longer period of time. 

3. Hire Purchase 

Hire purchase is where you pay a deposit on your car, and then pay for the rest of the car in monthly installments over a certain amount of time. Using this option, you won’t own your car until you have paid the last installment. 

These agreements are normally brokered by the car dealership and allow you to spread the cost of purchasing your car over a longer period of time. The obvious downsides being that you pay interest on the money you owe, and you don’t own the car until the last payment. 

4. Personal Contract Hire 

If you don’t plan on purchasing your car, then personal contract hire can be a good option. In this option, you lease the car for a certain period of time, while making monthly payments

You have to be careful to stay within your mileage quota, otherwise you might have to pay penalty charges, and equally, you may have to pay for any damage done to the car, but this option means you avoid issues like depreciation. 

This option is perhaps not as common as some of the others, but well worth looking at nonetheless.

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