Financial options for purchasing a car

Fri 18 July 2008
For many of us these days having a car is not a luxury any longer but a necessity. Some of us use cars because we having kids and families that need to be ferried around, and others need a car because of work, either to get to work and back or to use for work.

Whilst using public transport is definitely encouraged, particularly given the cost of running a car these days, for some people it would be totally impractical not to have a vehicle. However, a vehicle is no good to anyone if it is unreliable or worse still dangerous, and therefore you may be looking for ways to finance the purchase of a newer more reliable vehicle.

There are a number of options that you can take when it comes to purchasing a newer vehicle. Your circumstances, budget, and needs will help to determine which of these options is best suited, but it is important to look into all of the choices so that you find the right solution for your needs.

Over recent years a popular form of financing a vehicle has been PCP or Personal Contract Purchase. This is a flexible and convenient method that offers a number of choices. It can also help to keep your monthly repayments down.You make monthly repayments on your chosen vehicle for a specified period of time. You can arrange repayments on just a portion of the value of the vehicle, with the remainder being deferred until the end of the term, which is known as a balloon payment. This is what helps to keep your repayments down each month.

At the end of the term you will have several choices. You can return the vehicle to the dealership and you will owe nothing more on it. Alternatively you can choose to take out another PCP plan on a newer vehicle and return the old one. Finally, you can make the deferred balloon payment and the car becomes yours.There are other options available to those that wish to purchase a newer vehicle. You can opt for a bank loan, which means that you will have more choice over where you get your vehicle from. You will find that some banks offer specialist car loans with a range of additional benefits such as reduced insurance costs and free HPI checks.

Sources:-
http://www.thriftyscot.co.uk