March 10, 2020 at 3:03 PM
When you are buying a car, you will more than likely be offered a finance scheme. Leeway Motor Company always want our clients to be updated when it comes to the motor industry. We will explain the different types of finance plans, how to understand your payment options and the advantages of them. Leeway wants to share with you all of the options available to help you make the best choice for you and your financial circumstances. If you would like more information on the finance options available at Leeway please get in touch on 01633 271 555.
Hire purchase is secured against the vehicle itself and means you do not own the car until you have made the final payment. You are not able to see it without the lender’s permission, although you are able to return it. You usually pay a deposit which is often 10% and then repays the balance in instalments, plus interest, over a loan period. At the end of the car, you will own the vehicle outright.
Personal Contract Purchase
This typically involves paying a deposit and then low monthly instalments over a fixed period of time. At the end of this, you can either pay in a lump sum which will allow you to be the sole owner of the car, you can return the vehicle or sell it privately to pay off the remainder. This usually suits people who want to change their car frequently.
This is like a PCP, with low monthly payments, however, you have no option to buy the car at the end, however, it is convenient and it’s easy to change the car. The type of car, length of contract and agreed mileage limits determine the overall leasing cost. You will normally have to pay three months rental in advance.
0% Finance Deals
0% finance deals are often offered to shift an outgoing or slow-selling model. These can work out affordable and with no interest charged to your monthly instalments. These do usually require a larger deposit which is usually 35%. It is important to note that if you miss any payments you will usually be switched to a scheme with a higher interest rate.
How Do I Get The Best Car Finance Deal?
Thinking Long Term
Low monthly payments may look enticing, but it is imperative to consider the cost throughout the entirety of the finance scheme. A longer payment term means you will be paying interest for longer and the car could cost you more in the end.
Know The Rate
The key figure to understand is the annual percentage rate - the interest you are paying over the term of the finance agreement. Check how this figure compares between different payment plans you’re offered and compare it to the rate charged on a personal loan you might qualify for.
Take Your Time
Do not be pressured into anything - get all of the quotes in writing and take them away to have a closer look at the terms and conditions before finalising anything.
Leeway Motor Company
Leeway Motor Company are an approved Motonovo and First Response finance provider and also tailor finance packages to our client’s needs, we do this with a modern online professional proposal system which will give you an answer in less than 10 minutes. For more information on the finance packages that Leeway Motor Company offer please get in touch with us today on 01633 271 555.