See Whether The Loan Product Includes Any Protection Insurance

Category: Finance.

A car has different meaning for different people.

But the concept of a car has changed so much. While the younger generation enjoy thrilling, high speed drives in trendy cars, matured people hope reaching their destinations quite safely and easily. Today for many a car is much more than a vehicle that leads to their destination. In the past only those who possessed ready cash could buy an expensive car, but the situation has definitely improved today. To possess a car is considered a status symbol and is an indication of the prestige of any business. Now a day, car lenders offer many finance products at attractive rates to woo the buyers and to stand apart and maximize profit in the highly competitive market. It is estimated that about four in ten personal loans availed in UK are for buying cars.

The outcome has been very positive with so many now finding it easy to buy their dream cars. Brits buy more than nine million cars each year. Many kinds of financing options are available in the car market depending upon the cost of the car and your repayment capacity. After house, purchasing a car is considered as a major investment by many. One such option is PCP or personal contract purchase in which an initial deposit is submitted initially followed by monthly installments. You can also switch over to another car and continue making repayments or simply return the car to the owner.

At the end of the contract period the final lump sum amount is paid and the car becomes yours. But be careful- since you don t own the car during the contract period, so any default in repayments and the car may be repossessed. This is almost similar to a bank loan in which you pay monthly repayments for a fixed time period and at the end of the agreement the car is yours. The second option is Hire Purchase. Contract Hire financing gives any business the freedom to lease out new cars without buying them. All of the above options have many pros and cons.

With monthly rentals new cars can be leased at cheaper rates. While a PCP loan keeps your monthly payments lower than a personal loan. The disadvantage with HP is that you don t own the car during the hire period. A personal loan has the lowest annual percentage rate among various car finance options and doesn t have any arrangement fees. Any one with a good credit rating can easily get standard bank loan and it gives you the freedom to purchase your car from anywhere you like. Secured car loans may require you to pledge your property against the loan amount. Direct lending is also possible with financing companies and credit unions.

Bad credit car loans are available at higher interest rates with private dealers and financing companies. The most common type of car financing involves the dealer and the buyer. But they may require you to buy car from a certain dealer. A contract is fixed and the buyer agrees to pay the amount financed plus interest for a fixed period. Buying a car is an important decision. The dealer usually sells the dealership to a bank or financing company which then manages the repayments. First of all you have to decide what you want and how much payment you can afford.

Look for established firms with good reputation. See whether the loan product includes any protection insurance. Many online financiers have car loan calculators for comparing various deals. Go online with a specialist broker if you are in doubt. Know in advance the total amount payable at the end of the loan period. Although buying privately could save money, it is more risky than buying from a dealer as you get no protection of law.

Make sure that the car is in excellent condition. Take advantage of the free test drives offered by the dealers. In case you re exchanging your old car please be aware if it s true worth. Know more about cars on finance And before you sign any contract make sure that you have a clear idea about the terms and conditions.

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