Business — July 11, 2019 at 8:25 am

Essentials For Financing A Car


In our current age, it’s important to have a vehicle to get around. This is why many people are infatuated about the idea, earnestly desiring a car to call their own. Now, the purchase takes a lot of money, which turns people away from the idea. However, there are many options out there that would help you finance it.

So, let’s get to it.

Find A Good Dealership

The most important thing to consider before financing a car is finding the right dealership. You need one that is renowned, having good reviews and the best customer service.

That is why you need to go big names like the Berwick Motor Group.

Hire Puchase

Hire purchasing a vehicle is similar to taking out a mortgage. Because you don’t own the vehicle until you finish paying the installations. Once you do this, you gain full ownership from the car dealership.

If you’d like to hire purchase a car, know that you must have enough cash to pay a security deposit, which is usually 10-20% of the total amount.

You’ll be paying the installations at the end of every month like a bill. Now, how you get the money to pay for it is entirely up to you.

Most of the time, people get it by taking out a loan (which we’ll be discussing below)

A disadvantage of hire purchase is the fact that you must settle the total sum by the end of a year or two. So, your monthly payments would be huge.

Personal Contract Purchase

Its name sounds similar to hire purchase as it is. If you go down the PCP route, you’ll be paying monthly installments to the car dealership until you pay off its sum, getting ownership of the vehicle.

However, there is a catch. It differs from hire purchase as you go into an agreement with the dealership as to how long you want the car, once you reached the end of this term, you have the choice of returning the vehicle or continuing its payment scheme.

What’s great is, you won’t be paying the full amount. Instead, a predetermined value that considers the mileage that you’ll have used during your contract. So, the price after use will be deducted from the  original selling price- making you pay this difference.

If you manage to exceed the designated mileage, you will be asked to pay extra at the end of the term.

A Bank Loan

Banks loans are the most common way people finance the purchasing of a vehicle. Most of the time, a personal loan has to be taken out.

Unfortunately, if you want to pursue a personal loan, you need a lot of documents to get accepted. First of all, proof of stable employment and salary slips showing you are able to pay back the amount are needed.

You won’t get accepted if you haven’t been at the job for a certain amount of time, as well.

Credit Card

It is rare for dealerships to offer purchasing via a credit card, but it does happen. However, you’d need a card with a large credit limit as you wouldn’t be able to pay for it.

If not, you could split the cost of the car between your card and another means, such as a loan.

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