Many people in the UK do not have the luxury of being able to fork out a large sum of money in cash on each occasion they need to buy a car; that’s just a fact of life for great numbers of us. And if that’s the case for you, it might mean that instead of buying your next car outright with money in your bank account, you look into the variety of options for car finance in the UK and Essex.
There are five main types of car financing that you might consider; three that are generally offered by the dealership, and two that can be arranged independently if you don’t want to buy outright in cash.
Dealer financing options include hire purchase (HP), personal contract purchase (PCP), and personal leasing (contract hire). Independently, you might organise a personal loan or pay on credit card if the benefits are better.
All of these car financing options have their advantages and disadvantages, so it is important to make sure you find the right solution to suit your needs. To help you do just that, here are five top tips for financing your new car.
- Know the rate of interest
As with any kind of loan and financing, car finance will have an annual percentage rate (APR) that you have to pay back on top of the loan amount over the duration of the finance agreement.
The APR for any given car finance can vary depending on the finance company, payment plan, and payment term that you choose. Compare the APR with the interest rate that you might be charged on a personal loan, and the APR from other sources, to make sure you get the best possible deal.
- Consider the long-term implications
It might be tempting to choose the car finance option with the lowest monthly payment, as this will certainly be the most budget friendly in the short term.
However, lower monthly payments might mean that you have to pay back the loan over a longer period of time. This means you will be paying interest for longer, and so it might actually end up costing you more in the long run.
- Always do your research
Don’t be afraid to shop around until you find the right deal. You might like to try a few different price comparison sites to find the right deal for your circumstances. Sometimes, even the same lender can offer you many different finance plans.
The main thing is to remember to take into account all the different costs, including the deposit amount, APR, and any additional fees or payments you would be required to pay.
- Try negotiating
Once you have done your research, you will have the knowledge that you need to try negotiating a little bit. Speak to the lender about your deposit contributions and APR to see if there are any discounts that you can take advantage of.
- Don’t feel pressured to make a decision straight away
And finally, but most importantly, take your time! Make sure to get a copy of every quote in writing (whether physically or electronically), and take your time to mull over the pros and cons of each deal, looking at the terms and conditions before you make your decision.
When it comes to finding the right car finance for any of a broad range of circumstances and requirements, there might be no need for you to look further than CarFinanceGenie. For a free and no-obligation quote from us – sourced from our extensive network of lenders – why not apply today?