You have finally found a car of your dreams. Now you are wondering where to get money to make your dream come true. Car purchase is not an easy task. It requires parting with a huge amount of money that may be difficult to have in a single instance. However, there exist different financing options that can help you enjoy the ride of your dream while making regular repayments. This will help spread the huge amount to small monthly repayments. It is important to conduct a thorough research on different financing option before settling for a particular alternative. This is in order to find the best affordable alternative. We are going to look at best financing option for buying a car in this article.
Best financing option for buying a car using personal loans
You can opt for a personal from your preferred financial institution and use it to buy a car. These include a loan from banks, credit unions, building societies or any other financial provider. These institutions are going to issue you with a loan depending on your credit score. If you have a good credit rating, a personal loan will offer you a cheap alternative to purchase a vehicle. Compare different market lenders annual percentage rates before settling for a given deal. Personal loans will cover all the financing cost of buying a car and offers competitive interests.
Hire purchase agreement
This is a financial agreement between a buyer and an auto dealer. It requires the buyer to make initial down payment and regular monthly repayments to settle the amount due. The initial deposit is usually a huge amount compared to the regular monthly payments. The vehicle is used as collateral for this loan and ownership does not change until the last repayment. Dealer hire purchase offers competitive rates for new cars and are quick to arrange.
Personal contract plan
This is an alternative to hire purchase agreement that allows you to use a car over a given time period. After the expiry of the agreed period, one can opt to purchase the car by paying a lump sum amount or return it to the dealer. It requires an initial deposit and regular monthly repayment over a given period. The repayments, in this case, are lower than in a hire purchase. The dealer offers regular servicing to the car on agreed mileage. If you opt to buy the vehicle, the lump sum payment is usually the market resale value. However, if you don’t want to purchase the vehicle, you can opt for a trade in or return the car without paying anything.