Car Finance

For many of us, buying a car is a serious financial outlay. Many of us ofset the cost of buying, but taking finance to spread the large sum over a period of months, or years. It is really important to shop around when considering finance on your used car, as many of the deals or options given to you by the dealerships might be more expensive.

Dealer Car Finance

If you are buying your used car from a car dealer, then they will usually be able to offer you finance. Careful though, there are pitfalls:

• Remember that if the dealer is offering you 0% Finance, that it is the dealer who will have to pay for the cost of the finance, and therefore the car will be more expensive
• Watch for the APR rates and the monthly repayment amounts
• Check for any hidden fees and charges

If you need to compare deals, then you can look at the APR and compare that way.

Choosing between finance or a loan depends on whether you want to own the car or not. You will own the car with a loan, but only at the end with a HP (hire purchase) or PCP scheme.

A secured loan means you own the car, however the loan will need security, and obviously if you default badly, the lender will take the security.

CAR FINANCE TERMS

APR
APR means Annual Percentage Rate and includes all charges, so it’s the easiest way to compare finance

PCP
Personal Contract Purchases mean you can fund only part of a cars price, with a balance at to pay at the end of the term. At this point you can either buy the car or trade it in and walk away.

0% Finance
An interest free loan – you only pay back the amount you borrow

HP or Hire Purchase
You pay a deposit, and the rest in monthly instalments.