Sunday, 15 March 2020

The Lowdown on Car Fiance

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Whether or not you’ve got the money to buy a new car, there are several options out there that will help you get a step closer to purchasing the vehicle you want or need. The hard part often isn’t finding an option, it is often choosing the best one for you as there are so many different choices available to motorists.  

Most people opt to go through a dealer finance option such as Personal contract purchases or Hire purchase, but these are the only choices. There are other factors you should include such as independent finance deals that could be work out more cost effective in your circumstances. To help you choose, we’ve got the lowdown on the different options when it comes to car finance.  

Independent finance  

Often overlooked by most people, independent finance is an option that could be cheaper in the long term. Banks and building societies offer personal loans that don’t require a deposit and will also have lower interest rates that dealer finance options. With a personal loan, you can pay for the vehicle outright and then pay the bank back with monthly repayments.  

It is essential to note that in order to get a good loan from the bank you must have a good credit rating. You also need to be sure that you have the funds to pay the bank back, otherwise you could come into money troubles.  

Another way you can fund the purchase of a new car is by using a credit card. Similar to a loan, you will just be paying the banks off, you will need to ensure that your credit limit is large enough to pay for the vehicle. However, you will have to be strict when it comes to your monthly repayments otherwise you will be charged for late or missed payments.  

Dealer finance  

Most people that opt for finance will do it through a dealer and the most common way is through Personal contract purchases (PCP). This is a good option for anyone looking for low monthly repayments and the possibility to change their vehicle every few years.  

With PCP, you will put down a deposit and make monthly payments, at the end of the agreed term you will have the option to pay a sum and own the vehicle, give it back or trade it and make a similar agreement on a new car.  

If you’re looking for something more long term then a Hire purchases (HP) might be a better choice. Like with a PCP deal, you do not own the vehicle, you will make a deposit at the beginning and follow this with monthly repayments until the car is fully paid off. It is only at this point that you will be the legal owner of the vehicle 

Personal Leasing

Finally, there’s Personal leasing which is really just renting the vehicle over a longer period of time. You do not have the option to buy the vehicle at the end of the term, only give it back or replace it with another. Leasing comes with low monthly payments and is a better option if you know you will want to change the vehicle every so often.  

That being said, you often have to pay a large deposit at the beginning and you will be reduced to mileage limits, something that could be costly if you go over the agreed threshold.  

So whatever your dream car is, there are plenty of options to help you get it! Do you have a car you would love to own or one you think would be perfect for you or your family? Have you ever considered using a fiancĂ© option to purchase a car? 


**This is a collaborative post**


  1. Some really great suggestions for finance options for purchasing a car, my plan for my next vehicle is to look art personally financing the purchase.

  2. We love our car so much and we paid it off last year, but in a few years time we'd look to upgrade and get a car we've both chosen. Having the option to have finance is such a good option x

  3. We are leasing a car but need to find out what is going to happen due to this crisis as my husband and I have both lost our jobs

  4. I never realised that there were different types of car leasing, great to see them explained

  5. Some really great idea and suggestions here . I don’t drive yet but these will definitely come In handy when I do x

  6. It always handy to know your options. We found it much cheaper to get independent finance rather than what the dealership was offering.

  7. This will come in handy as I'm about to take the driving test and then get a car :)