It has been estimated that approximately four in ten personal loans obtained in the United Kingdom are meant for purchasing cars. Buying a car is considered one of the major investments by many people. There are a lot of people who have the money required for driving away with a brand new car, but there are others who need to satisfy themselves with a used one. Previously, only those people who had ready cash could purchase expensive cars, but this is not the case these days because of the arrivals of car finance deals and loans.
Different Options Available
If you are willing to buy a car, then there are a number of car financing options that you can avail depending on the repayment capacity you have and the cost of the car. You can buy the car directly from the producer, avail car loan from the bank, find the car at an auction or contact a car dealer. Another option that you can use is the garages. You can also visit the supermarkets that have cars on sale. Apart from these there are relatives, neighbors and friends who might have the willingness of selling their cars. However, if you are not sure then you can take the services of specialists who are out there to provide the best help.
Personal Contract Purchase or PCP
One of the best options in the category of car finance deals is Personal contract purchase or PCP. This is a process where you are required to submit an initial deposit, followed by the system of monthly installments. On completion of the contract period, final lump sum amount is paid off and you become the sole owner of the car. You also have the option of switching over to some other car brand and continue repaying or you can return the car to its owner. However, you need to be very careful because you might not be the owner of the car during the term of the contract and therefore if there are any defaults in the repayments, the car might be repossessed.
Hire Purchase or HP
This is the second option that you can use. HP or Hire Purchase is an option which is quite similar to bank loan where you pay monthly repayments for a fixed period of time and on completion of the agreement, you are the owner of the car. The system of contract hire financing gives all businesses the freedom of leasing out brand new cars without purchasing them.
If you have a good credit report then it is always possible for you to get a car loan from a standard bank. This gives you the flexibility of buying the car of our choice from almost anywhere. You can also go for direct lending from credit unions and financing companies. Secured car loans might require you to put your property as mortgage against the amount of the loan. For unsecured loans, you do not need to pledge your property and get around 20,000 under this system.