Minggu, 03 Februari 2013

Car Finance- The Options? - Other

<p>Want a new car but don't have enough cash to pay outright? A plethora of finance options are now available on both new and used cars, making it easier than ever to drive a brand new Jaguar.Finance jargon is enough to give anyone a headache though so choosing the right payment method can be a confusing process! </p>

<p>For starters you'll find there are a number of purchase options, including Hire Purchase, Lease Purchase and Personal Contract Plans (PCP). </p>

<p>Hire Purchase is probably the most common type of car finance and you'll find that most car dealers offer this option. You'll pay an initial deposit, then a fixed monthly repayment and a final payment. You won't own the car until the final repayment is made though! Monthly payments will generally be higher than leasing or PCP for this reason. On the plus side deposits and rates are generally low. Hire purchase options are sometimes available with 0% APR (Annual Percentage Rate), basically an interest free loan. You might find there are often conditions attached though, such as paying up to a 50% deposit or paying off the loan within one year.</p>

<p>Contract hire is popular with both companies and individuals (personal contract hire) and is similar to hire purchase, expect there isn't normally the option to own the car at the end of the repayment period (although some companies might give you the option to buy the car for a fee). </p>

<p>You'll pay a small deposit and a monthly leasing fee, which is generally less than hire purchase. A great option if you like to change your car every few years as short term contracts, usually a year, are available. The downfall is there are penalty fees for exceeding a mileage limit. An optional maintenance package is available with a contract hire purchase.</p>

<p>PCP, or Personal contract plans, are also perfect if you want to change your car regularly and benefit from low monthly repayments. The repayment period is often flexible, normally between 2 and 5 years, although an early repayment fee will be incurred if you end the contract early.</p>

<p>A sizeable deposit might be required too, but at the end of the contract you have a number of options. You can hand the car back and owe nothing, unless you have clocked up excess mileage or the car is damaged. Or you can pay a 'balloon payment', a final lump sum based on the car's estimated future value (guaranteed at the time of purchase). Alternatively if the car is worth more than the optional final payment you can use the difference as deposit for your next car. Maintenance charges are often included also.</p>


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