Buying a car is altogether a different ball game today. From buying it on cash or buying it on finance, there are various options available. Nowadays, there are lot of options available in the market for finance for new as well as used cars. It is clearly an easier and affordable to buy a car on finance on monthly installments rather than on one-time investment. Therefore it is very important to find the best financing deal.
There are various types of cars on finance options like Hire purchase, personal contract plan and leasing plan. These types of plans helps the car buyer to pay in monthly installments with interest, hiring car for particular period of time, gradually settling it via lump sum payment to purchase it or returning it back.
Buying car on finance has various benefits. Given below are the top 6 benefits:
1. Hire Purchase:
This form of buying is quick and easy to arrange. It is repaid in monthly installments in the term of 1 to 5 years, including the interest. These are usually arranged by the dealers. At the end of the set term you get the ownership of the vehicle. It has low deposit and usually less Interest rates, which is quite competitive leading to a better deal.
2. Personal Contract Plan :
It is very similar to Hire Purchase which results into lower monthly payments. Herein the customer has to pay the difference amount between its current selling price and reselling price to the dealer, which is based on forecast of the mileage annually. This plan is for a shorter term of 1 to 3 years. Here, at the end of the term you have an option of buying the car or returning it.
3. Personal Contract Hire Buying:
It is a type of personal contract plan only. The only difference is in this plan you do not have an option of buying it, you have to hand it back compulsorily.
4. Personal Leasing plan :
In this plan you never own the car, you just lease it. Here you pay a monthly lease with maintenance and servicing included. At the end of the term you hand the car back to the dealer. This plan is for a shorter term of 1 to 3 years.
5. Leasing for Business :
It is generally used for business purposes. Companies can either buy the car or finance lease for business use. Here they pay lease regularly and at the end pay lump sum to buy it. They can also avail the equity benefit by selling the vehicle at the end of the term or agreement.
6. Residential Value Lease :
Here you pay an agreed amount month on month basis and gradually pay a lump sum amount at the end of the agreement.
Now when you have read the tips on buying, you can certainly get the best deal to finance your car.