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January 22, 2018

Finance Options When Buying A New Car

Having a car is not a luxury any longer, but a necessity. Some of us use cars because we have 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.

While using public transport is definitely encouraged, particularly given the cost of running a car, for some people, it would be totally impractical not to have a one. However, a vehicle is no good to anyone if it is unreliable or worse, dangerous, and therefore you may be looking for ways to finance the purchase of a newer and more reliable such as the Audi Q5 2018.

Some of the options available

There are numerous options that you can take when it comes to purchasing a brand new vehicle. Your circumstances, budget, and needs will help 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. One of the simplest methods of financing the purchase of a new car is on HP or Hire Purchase. With this method, you make monthly repayments on your purchase until you have paid what you owe on it, and then the car becomes yours.

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 many options. 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 the 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 new 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. You could go for dealership finance as well, but you should bear in mind that this can be costly in some cases, especially if your credit score is not very good. It also means that you will have to get the vehicle from the dealership that is offering the finance.

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