Whether you are stuck with a clunker of a car that breaks down constantly or have been stuck on foot for far too long, you might have recently found yourself wondering how difficult it would be to get the financing necessary to own your own vehicle. The truth is that there are plenty of options out there to help just about anyone get the money to get them driving off into the sunset. The difficulty is picking the right financing and understanding exactly what you’ve agreed to. Here’s a breakdown of the three main types of financing that people use, and what you can expect if you choose one of them.
According to the Telegraph, personal loans for cars are at the lowest rates seen in a decade. They name some of the advantages personal loans found on the internet have over traditional bank loans, reporting that, “…drivers can borrow between £1,000 and £15,000 over two, three, or five years, and the rate is fixed for the duration of the loan. Many deals are available online, and you can get an instant response to your application.” If you are looking for the easiest car finance possible, then personal loans could be your perfect option. The process requires research on your part, but cuts down on a lot of the confusing and complicated jargon that you might have to deal with at the bank, or at through manufacturer financing.
Dealer and Manufacturer Financing
Deals offered by your dealer or the manufacturer of the car you wish to buy could end up being the best available, but the problem is that they are often so complicated that you might not fully understand what you are getting yourself into. Many of these deals work based on a hire purchase agreement or a personal contracts purchase agreement. As Money Savings Expert has explained regarding car financing, the dealer or the manufacturer will offer you money that is secured against your car, meaning they can take it and maybe even more in the event you don’t pay, they will give you an option to lease the vehicle for two to three years and then at that time you can more easily pay the remaining balance so the car becomes completely yours. These are both great options that can work well with a lot of car buyers, but the complicated language and details can make it difficult to work your way through to understanding exactly what you’ve agreed to.
Money Advice covers several different options and the pros and cons of each for those out there searching for the right car financing. It’s true that compared to the prospect of huge loans to own your own vehicle, leasing a vehicle for a fixed monthly rate seems like a great alternative, but as they point out, you will be expected to come up with a hefty deposit, there’s almost always a mileage limit, and monthly costs are typically much higher. The biggest downside to leasing a vehicle is that it’s never really yours. A big part about having your own car is the freedom and mobility that gives you. With leasing, your mode of transportation is actually going to keep you stationary.