The best way to finance a new car

Finance a new car

Buying a new car is a very difficult decision to make. There are so many options of car models, loans, financial rates, etc., that you may get confused about which one to choose and which one to discard. Running costs will also have to be considered by you when buying a car. After a house, car is the second most expensive asset that you will likely buy. So, it is very important to buy a car at the best price and best deal on financial interest rates.

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Savings or cash

When interest rates are very low, you can not save much in your building society or bank account. So, you can use them to buy a car. Save enough money for emergency purpose before paying a large amount of money for your car.

If you do not have enough money to pay the full amount of the car at once, you may go for financial loans. Make sure to pay back the full money on time in every month. You can also use your credit card instead of cash to buy a car, so that you can get benefits that are offered by credit card purchase protection.

Personal loan

If you decide to buy a car, a personal loan from a financer, building society or bank can also be availed by you. You must have a good credit loan rating to get a personal loan. Make sure that you have not taken any home loan. Otherwise, if you fail to repay the full loan amount, your home will be at major risk.

Do compare annual percentage rate (APR) to get the best interest rate for your loan. Charges and interest are included in APR. You can get personal loan over the Internet, phone or face-to-face. The entire cost of the car can be coveted by it. A competitive fixed interest rate can also be charged in this loan.

Hire Purchase (HP)

One kind of buying a car on finance is known as hire purchase. You have to put down a deposit of 10% and the money has to be repaid in instalments for over 12-60 months. The car dealer arranges the hire purchase which is a better option for buying a new car. Until you pay the full amount of loan, you can not get the ownership of the car. Hire purchases can be arranged easily and quickly. You have to deposit a low amount for the flexible repayment terms of 1-5 years. You can avail hire purchase at competitive fixed interest rates.

Personal Leasing

A fixed monthly amount can be paid by you for the use of a car. This money includes maintenance and service charge. You have to hand the car back when the agreement ends. In this process, the car never belongs to you. This agreement can be made at a fixed monthly rate. It comes with flexible payment terms of 1-3 years.

You can choose any of the finance options to invest in a new car, if you do not want to invest a large amount of cash instantly.