August 27, 2020 at 3:07 PM
If you're in the market for purchasing a car, one of the main thoughts that most people have is the process of financing a car. A car is a huge investment, especially when buying new. Cash is usually seen as the preferred method when making a large purchase like a car, however isn't always possible in today's economical climate. Even for those who do have the cash to purchase a vehicle outright, it isn't always the best option to go for since there is a range of benefits to financing a car over purchasing one.
In this article, we'll discuss a few things that you'll want to consider when you're thinking of purchasing a car. Financing plans may seem confusing so we hope this article will clarify a few advantages of car financing to better inform you with your decision.
Things to consider when financing a car:
There is a range of things to consider when you're looking at a new or used car, especially things that will affect the overall cost. Type of cars will of course matter since you'll want to find a vehicle that matches what you're looking for. Whether you're looking for something sportier or perhaps more practical for your use, you should always look at something that's going to suit your needs.
You may also want to consider options like part exchange if you already own a car. This gives you the chance of lowering the overall cost of the vehicle which can help to lower the costs of financing.
Ways of financing a car:
There a range of different ways to finance a car. These range from hire purchase, personal contract purchase, personal leasing and 0% finance deals. We've written a more in-depth article which you can find here: https://www.leewaymotorcompany.co.uk/blog/a-quick-guide-to-car-finance/
To break them down briefly, we've written a short description for each type below:
Hire purchase is secured against the vehicle itself and means you do not own the car until you have made the final payment.
Personal Contract Purchase:
PCP's usually involve paying a deposit and then paying low monthly instalments over a fixed period.
Personal leasing is similar to personal contract purchasing, however with leasing you won't have the option to purchase the car at the end of the plan.
0% Finance Deals:
0% finance deals are often offered to for older models of cars that a dealership is looking to sell. These deals can work out much cheaper since there is no interest charged on any finance plans taken however they do often require a larger deposit.
Advantages of financing a car:
The main advantage of financing a car is spreading the cost of what would be an expensive item over several months making it much more affordable. This is a huge benefit since most won't have the funds to purchase a car outright.
Another benefit that may be interesting for those looking for a new car is that you may be able to afford a better car for the money you're spending. Depending on the overall deposit amount as well as the number of your monthly re-payments, your budget may stretch further than it would if you were purchasing a vehicle outright.
Breaking down the purchase of a new car may also be beneficial if you're tight on cash since you'll be able to afford to maintain, run and insure a vehicle whereas spending your entire budget on a car will leave you in a poorer position financially.
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.