Buying a car is not a very simple decision to take. For financing the cars, you will find various options in the market. But which one will be suitable for you, that you are required to decide properly. Let us discuss some of the options to make your task a bit easier.
Savings or Cash: Your savings account will not earn much in the banks with low interest rates. So instead of keeping the money idle in your savings account, you can use the fund to buy a car. But remember
That you have some amount of savings left in your account for emergency purposes after purchasing the car
If you do not have enough savings to buy the car, use the amount to make a fixed deposit with the highest possible amount.
You can also buy the car with a credit card. But make sure you are paying it full within the next month.
For obtaining the total cost of maintenance, you can use the cost calculator by downloading the software from the internet.
Personal Loan: Try to avail loan from banks or any finance providing company. You must not keep your home as the security of your loan. In this case, the home might be in a risk if you cannot repay the loan timely. You must go through various available interest rates by comparing the annual percentage rate (APR). You can go for the certified pre-owned cars, if you think that new cars will blow out your budget. The biggest advantage of obtaining a loan is that you can avail them face to face, through internet or just by a phone call. If you can truly shop around, you will definitely find a competitive fixed rate for yourself.
Hire Purchase: It is a form of purchasing where you can pay the price in installments within 12-60 months, generally with an interest as low as 10%. The car dealers can arrange for the hire purchase and the loan can be secured against the car only. The disadvantage is that you cannot completely own the car unless you have made the final payment. For short term agreements, this method may consider to be very expensive.
Personal Contract Plan: With very low monthly payments, you can avail a personal contract plan easily. Instead of paying the cost of the car, you may agree to pay the difference between its sale price and the price for reselling it back to the dealer. The plan is dependent on the forecast of the annual mileage, which is generally higher than the agreement terms. Payments can be done within a short period within 12 to 36 months.
Personal Leasing: With a fixed monthly cost, you can enjoy the maintenances as well as servicing. You also have a flexible payment terms between 12 to 36 months in personal leasing.
While opting for these options for financing your car, you must ensure that you can make the monthly payments easily. You must compare the entire cost of borrowing including all the loan charges.
Author Bio: Stephen Marshall is a car dealer who sells certified pre-owned cars. In this article, he is providing tips for opting various ways for financing your car.