The majority of people wanting a new or used car decide to take out a loan. Taking out a loan means that the lender buys the car for you, and then you have a certain number of years to pay them back the money they spent on the car. Many people have anywhere from 36-72 months to pay back their loan, and depending on how much money you can pay back each month you can choose a shorter or longer loan term.
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.
When it comes to applying for a car loan, regardless of whether it’s through a bank, dealer finance or other institution, the criteria are designed to ensure you’re a risk worth taking. Ideally, you will have a solid track record, but even if you’ve never had a loan before, have a bad credit history or limited funds in your account, here are four tips for getting finance.
Many of us try to implement positive lifestyle changes throughout our lifetimes. That’s definitely how it feels for me. That’s why I promised myself I’d get my body and my finances in shape this year. While I’m dreading all the cardio and weightlifting that comes with the former, I’ve got a clear vision of how I’m going to handle the latter. And I’ll launch my plan by refinancing my auto loan with Wells Fargo.
Refinancing a vehicle loan pays off your existing auto loan, just like refinancing a home mortgage. But it’s much faster and simpler to refinance a vehicle loan. Interest rates on auto loans are the lowest they’ve been in a long time, thanks to current FED polices. So it’s a great time to consider refinancing your auto loan to help your money stretch a little further. Maybe a lot further.
You might also consider consolidating your auto loan and other debt into a fixed-term loan. This gives you the convenience of making just one monthly payment to a single creditor as opposed to making multiple payments to many creditors. Consolidating your debt can also significantly reduce any high interest rates you may be paying on your individual loans. Decreasing your interest costs can save you money both in the short term and over time.
Whichever route you choose, it’s easy to get started. Just jump online and start researching banks, credit unions, and vehicle dealerships, and any other potential creditors to find the best rates. Hopefully, it won’t be long before yours and my finances are back on track. If this works out the way I want, I might even get to that cardio and weightlifting.