Buying your next car - Car Finance Verses Personal Finance?

Funding your next car provides you with a several options of funding methods, but which one is right for you?

Well firstly there are some simple rules which will dictate which method suits your personal circumstances:

Firstly what is your credit history like?, do you have a strong credit file (Which is held at either Experien or Equifax) or do you have impaired credit?

With a good credit history lenders offer a wider range of motor loan products, Hire Purchase, Lease Purchase, Personal Contract Purchase (PCP) and personal loans. All these products apart from Personal Loans are secured against the vehicle, so full ownership does not occur until you finish paying the loan term.

People with impaired credit have less choice in that Hire Purchase is the mostly likely option on offer. What ever your circumstances, car loans and van loans also depend upon your attitude towards ownership, do you actually want the full costs involved in owning the vehicle or would you rather have the cheapest monthly payments and except that you either pay a balloon payment at the end of the contract, or simply return the vehicle, having what has been almost a long term rental car or van.

It is important to decide on car loan protection, payment protection insurance (PPI) is provided by a multitude of insurers, it ranges from 9% - 17% of the monthly finance payment, dependant upon what level of cover you require, ranging from permanent disability cover to full unemployment and redundancy cover.

Creditplus has an independent view of over 35 different lenders and can therefore provide advise on many options before you buy.

Copyright © 2005-2006 Creditplus Limited, all rights reserved.
Sitemap