Flexible Payment Plans

Buying a car can be a significant outlay. For many, other than getting a mortgage to buy a house, purchasing a car is the most expensive thing they will ever buy – well, until their next car upgrade!

And there’s little doubt that simply coming up with the cash to buy one from the dealership straight out is beyond most of our reach – after all, who walks around with thousands of pounds in a briefcase these days?

Thankfully, there are a great number of flexible payment plans available to purchase a new car.

An Unsecured Bank Loan

Going to your bank (or, indeed, any other lending institution) and asking for a loan is often easier than people think.

Many banks are willing to lend enough to their customers to afford a car and will offer competitive rates to make it a viable option.

As a bank loan of this type is unsecured, that means you are not in direct danger of losing your car should you miss a payment. Of course, the bank will chase you for the money, but there is no contract linking your vehicle with the loan.

A Hire Purchase (HP) Agreement

Hire purchase is a term which means ‘loan tied to the purchase’ – in this case, your shining new car.

With hire purchase, you pay a larger amount as the first payment (depending on what you can afford) and the remaining amount is spread over a number of monthly payments (usually 24 or 36).

There’s interest added and the loan is secured on your car (so if you miss payments, they will request your car back), but it’s a good system for those wanting a new car from a dealership.

With hire purchase, once the final payment is made, you own the car outright.

A Personal Contract Purchase (PCP) Agreement

Personal contract purchase is a lot like HP, but the repayments are lower and at the end of the term you can choose to pay one final lump sum to own the car, or simply opt to give it back and upgrade to something new and sign a second PCP agreement.

PCP is great for people who like to drive a new vehicle as it’s a relatively cheap way of ensuring regular upgrades.

A Personal Contract Lease

Leasing a car means the car never belongs to you - it is always the property of the leasing company. That comes with all sorts of benefits (maintenance and servicing, upgrades, support) and only the simple downfall is that you don't own the car that you are paying for.

Car Leasing has become more and more popular over the years, allowing you to budget each month for your car without worrying too much about unexpected overheads.

Additional advice

With any financial purchase, it is important that you do your research and shop around.

Don’t just accept the first offer you receive as the interest rate may be high or the length of the loan longer than others.

Take the time to walk away, have a good think about it and make your decision informed and with a cool head.

Remember – the car dealer or lender will still want your business the next day and even if that particular car is lost through your delay, there are thousands of others which will match your requirements.

Give that large financial commitment the respect it deserves and compare quotes for loans to get the very best fit for you.

There are plenty of online resources available to help you determine exactly which is the perfect product.

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