Long gone are the days when people save up to a buy a new car. Just this September £2.64 billion worth of new cars were bought on finance schemes when the new 65 plate registration came out.
With finance and leasing schemes offering great deals on the newest makes and models, more people than ever are choosing not to spend their savings on owning a car anymore.
Buying a new car on finance is more popular than ever. Figures from the Finance and Leasing Association suggest that around 8 in 10 cars are now bought on finance. With big dealers offering amazing payment plans and corporate employees like the NHS offering leasing schemes it’s easy to see why.
Saving up to buy a new car outright is expensive and often can limit your options as the newest cars are hugely expensive. With a leasing scheme you can put down around £2000 and set up monthly payments of £200-£300 and be driving around in a brand new top of the range car.
This year sales for cars on finance schemes are up 10 per cent with so many attractive finance options around that it can be hard to choose. There are a few different finance options. Whether you go for a hire purchase finance plan or PCP scheme is up to you as both have their benefits.
Hire purchase is where a loan is secured against the car so you don’t own the whole vehicle until the final payment is paid. The monthly payments are set over a certain period which can be from 12-60 months and you have to put down around a 10% deposit.
A PCP is really popular at the moment and often has lower monthly payments. It works out that you agree to pay the difference between the car’s sale price and the price at the value at the end to sell it back to the dealer. You can take out a car on a PCP for a shorter term from 24-36 months and at the end of a plan you can either hand the car back, get a new deal on a different car or pay the existing money left over and own the car.
Car finance plans have really gone from strength to strength and offer those not in a position to buy a car many more flexible and affordable options.