Finance for My Vehicle: A Rundown of Options

car loan

If you are currently in the market for a new car, then you’ve probably wondered what the best way is to finance your new vehicle. Brand-new cars tend to set you back at least a few thousand pounds, depending on the make and model that you are going for, whilst you can often find more bargains by going for a second-hand car – even a car that’s only been driven out of the showroom or has a minimal number of miles on the clock will usually be a lot cheaper compared to the brand-new version. So, you’ve got your car in mind, here are the finance options to consider before you drive away.

#1. Purchasing Outright:

If you have the money saved up and ready, it might be worth purchasing your car outright. This will save you all the hassle of making monthly payments and the car is solely yours, so there’s no need to worry about having to give it back or even worse – having it repossessed – if your circumstances change in the future. Purchasing your car outright also means that whenever you feel like a change, you can simply sell it on and use the money for a new one. But on the downside, buying a car outright means that you’ll lose money eventually, as the car will depreciate in value every day. 

#2. Car Finance:

Car finance is one of the most popular ways of financing a brand new or second-hand car. Usually, it is in the form of a hire purchase agreement and you’ll be making a monthly payment for a certain number of years. You may or may not be required to pay a deposit, depending on the type of finance you are applying for. Some finance agreements come on a ‘just add fuel’ basis, which can be handy if you want everything to be taken care of with one payment, including insurance, car tax, and yearly MOTs. Car finance is offered subject to eligibility and a credit check, but don’t worry if you have bad credit – you can find options for you. Check out autofinanceonline.co.uk for more information. 

#3. Bank Loan:

Taking out a bank loan is another option that you might want to consider if you’re financing a car. You can use the bank loan to buy the vehicle outright and make your repayments directly to your bank, which is handy if you want the car to be owned by yourself rather than the finance company. Getting a bank loan can also mean that you will be able to take advantage of lower interest rates compared to car finance, so it’s worth looking into. 

#4. Leasing:

Finally, if you’re not too concerned about ownership, leasing could be an option for you. Leasing is similar to car finance in that you pay a monthly payment, but at the end of the lease term, you can return your car and swap it for a newer version or a totally different make and model. It’s usually cheaper than car finance and there’s no need to worry about your car losing value, as it’s never really ‘yours’. 

Which car financing option is the best for you?

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