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A Brief Guide to Your Car Finance Options

by Cindi Kuhn (2020-04-09)

Unless you are in a financially fortunate position, it is likely that you will need some form of car finance to purchase your next vehicle. However, when it comes to personal car finance, many consumers can become a little overwhelmed by their options. With the terminology involved and different terms or interest rates, it can be a little challenging to determine which the best choice is for you. This brief guide aims to showcase your options to help you have all the facts you need to make an informed decision.

Car Loans:

The most obvious choice for your car finance is a loan. Loans are available through high street lenders, dealerships and brokers. While your first instinct may be to opt for the dealership loan package or seek out your high street bank, this may not be the best option. The terms and interests for car loans can vary greatly and unless you have a perfect credit history, you are unlikely to be offered the most attractive deal from these institutions. However, a broker can help you to check all the available deals on the market. Brokers often specialise in offering finance packages for those with a less than perfect credit history. This means that you can obtain a very attractive deal. However, be sure to check the interest rate and charges involved before you agree to a deal.

Car Leasing:

Leasing is a form of car finance, Perth business owners may be familiar with, but in recent years leasing has become more common for private customers. Here's more information on Pcp Finance check out our website. Leasing involves paying a rental fee for each month to use the vehicle but the ownership of the vehicle remains with the leasing company. The lease is typically set for a predetermined period between one to three years, after which the vehicle is handed back to the leasing company. This type of arrangement can often be attractive for those looking to drive a new car, which they may not be able to afford to purchase. While leasing is often a less costly option, you should be aware that the depreciation of the vehicle is factored into the lease cost and there are often restrictions such as limitations on the distance allowed on the odometer written into the contract. This can mean that if you drive too many kilometers, you may end up paying a hefty penalty.

Personal Loans:

Another method of financing a new vehicle is to use personal loans. These types of loans can be unsecured or secured on an asset such as your home. This option is often seen as attractive as you can secure the funds you need and have the money available when you begin car shopping. While many of these loan deals may appear very attractive, you should consider carefully the terms. Often this type of personal loan is offered over a longer term. This means that while the interest rate may be one or two percent cheaper, you will still pay far more in interest over the total loan term.

If you would like to know more about your car finance options, contact us. We specialise in personal car finance and our team of advisors would be delighted to answer any questions you may have. When it comes to car finance, Perth consumers can be assured that we will help you to find the deal best suited to your specific requirements.