Car Finance – 4 Ways to Purchase a Car Without Breaking the Bank
To some people, cars are nothing more than a way of getting from A to B. To others however, cars are an enormous passion, with some literally earning a living from them. If you’re a self-proclaimed ‘petrol head’ you’ll no doubt have spent many a Sunday afternoon daydreaming about one day owning the sports car you’ve always wanted. Rather than day dreaming about owning your dream car however, why not make it a reality? Thanks to car finance, personal loans, and other means of buying, buying your dream car, whatever the price tag, is now easier than ever. Here’s a look at a few examples of how you can purchase a new car without breaking the bank.
Cash or savings
If you’re serious about buying your dream car, you may have decided to start saving up for it years ago. One day, the time will come when you have enough savings to be able to head out and buy your new car in one go. The benefit of using your own cash/savings is the fact that once you buy it, you then own the car and you can do with it whatever you like. Sure, there’s the tax and insurance to pay for, but once you own the car and have paid for it that’s it. If you can afford to buy it outright, buying it there and then is certainly going to work out cheaper in the long run. There’s also the bonus of you owning it, so you could always sell it if funds were tight.
A personal loan
Another way of buying a new car without spending a fortune on car finance is to get yourself a personal loan. A personal loan can be obtained from a finance provider, a building society, or a bank, as long as you have a fairy-impressive credit rating. Once you are approved, you then borrow the money and can pay it back in monthly payments over the course of several years. The longer you spread out the cost, the less you will pay each month.
Personal Contract Purchase
Personal Contract Purchase, or PCP, for short, is a type of car finance where initially lower monthly repayments are made. Rather than obtaining a loan for the full cost of the car, you instead obtain the loan based upon its value now, and the estimated value at the end of your hire agreement. This is often estimated based upon your predicted mileage.
It is worth noting however, that like most other forms of car finance, at the end of the agreed hire period, you will likely have paid more for the vehicle than it is worth, thanks to the interest payments. After all, the PCP providers have to profit some way, otherwise they’re getting nothing in return. At the end of the term you have the option to pay the difference and buy the car if you really liked it, or you can start the process again with a new vehicle, or simply give it back to the dealership and pay nothing else.