The Different Types of Car Finance Deals
Financing is the best possible way to purchase a vehicle. However, it must be mentioned that financing a car is really not an easy deal. People do need to hunt a lot to crack proper deals for best car financing. Due to lack of consciousness, people often get in wrong track and end up borrowing excessive money. In fact, selection of financing option somewhat depends on the cost of car along with repayment capacity. So if you are planning for a car finance deal, then here is something useful for you.
Hire Purchase (HP) plans
If you want to take this kind of financial plan, you need to put down a deposit amount (approximately 10%) and the remaining balance has to be paid through monthly installments. The company, allowing the finance, will own the vehicle until the last payment is completely rendered by the owner along with an ownership transfer fee.
Most of the people admire this very car finance option while getting their dream vehicle. The money can be borrowed from bank, any financial institution, or money lenders at a fixed interest rate. You would stumble upon various sites which can help you to judge the interest percentage through APR (Annual Percentage Rate). Moreover, the monthly repayment depends on the loan period and interest rate.
Personal contact purchase (PCP)
This specific alternative of car financing works almost similar to the Hire Purchase plans. Also, this comes at a fixed interest rate and encompasses monthly repayment options. Further, the usual tenure of loan payment stays for 12 months or 36 months.
In case you have not done your homework scrupulously before selecting a finance option, you the dealers would assist you in financing your vehicle. Also, you need to check the details on present manufacturing finance deals. Comparing it in the market can be a smart move.
0% credit cards
It can be a smart car finance deal for used car purchase if you select credit cards offering at 0% for the preliminary period. Well, most importantly you got to be regimented enough to avoid inviting high interest rates after the end of the 0% period.
It’s a long term rental contract in which you need to pay monthly installments for a pre-specified period (often depending on the distance travelled).
Personal contract hire (PCH)
It’s a type of personal leasing for a period of two to three years. The leasing also depends on a certain limit of mileage of 10,000 miles a year. However, in this process you will be the owner of the car. Also, after the leasing period is over, you have to relinquish the key to the owner.
Self financing is undoubtedly one of the viable car finance deals options. Here you need to use your credit card to finance your car. Needless to say, leasing is not at all a commendable option as the aggressive lenders often charge high for excess mileage. So for many this self financing is a kind of a relaxing option for car purchase.