Car Finance

Car Finance - Explained

There are three important choices for you to choose from when looking for car finance:

Poor Credit History

Car finance is a method of obtaining a car loan if you are having difficulty in receiving credit or if you have had a poor credit history in the past.

There are few companies that will provide you with a no credit plan even if you have a poor history of credit.

Carinsurance-Choices have selected the best car finance companies that are able to provide you with a no credit check, even though you may have had some poor credit history in the past.

By having a poor credit rating can be viewed as climbing a mountain for those that are affected by it. Potential consumers can be put off in this position where they are unable to receive any finance from any lenders. However, this is not true.

Find out more about Poor Credit Loans for a no credit check loan

Hire purchase HP

The most popular form of car finance is HP (hire purchase) this is an extremely convenient way to buy a car.

Purchasing through hire purchase allows you to buy something that you couldn’t otherwise afford.

Securing a hire purchase loan combines elements of both the loan and the lease. To obtain a hire purchase loan you must reach an agreement with the dealer to initially pay a deposit and then agree to a time limit to pay off the balance in monthly payments, and at the end of the period of installments the car then belongs to you.

You can obtain a loan generally through a lender (usually a bank or broker) and this is normally handled by the dealer. The lender (bank/broker) essentially buys the vehicle and allows you to use it whilst you finalize the payments. When all of the payments are completed then the car officially belongs to you.

Find out more about Hire Purchase

By taking out hire purchase will effectively increase the interest rate, however, this is usually determined by your credit rating.

One important factor to take into account when taking out hire purchase is to check the APR of your monthly payments.

Personal loan

Personal bank loans for the purpose of buying a new or used car is very often the first place that we think of going to secure a loan to purchase a new car or used car.

One of the most overlooked options in car finance is the personal loan option.

The most attractive option of taking out a personal loan is the typical APR rate which generally falls in the region of between 6.3% and 7.9%, using this option can undoubtedly have significant saving for you, in that the terms of the level of interest that is to be paid.

Find out more about Personal Loans

If you are travelling down the personal loan route you will find yourself in a better position to strike a deal on the forecourt, rather than those that take out a personal loan. This is simply because the forecourt dealer will class you as a “cash buyer” this ultimately provides you with better bargaining power to select the model of vehicle you require, and you could also receive discounts as you are a “cash buyer” .