A car is not just used as a means of communication, but people feel good about owning a four wheeled machine. The love people have for cars is eternal. If you think of buying a car for your own, this article will be of great help. The car financing information will give you enough information that will guide you in the entire process. It will help you in getting a successful finance deal.
Financing a car is not like buying households or a gift for your kids. You need to be ready with the following things.
- Borrowing capacity
To get a good deal, you have to be patient. You can never get the favorable finance program for your car in a single day. Before deciding on if to buy a new or used car, take the time to calculate your budget. Be sure of how much you are able to raise and the amount you need to borrow. As you calculate your budget, ascertain your monthly payments. How much are you going to be able to pay monthly? To get this answers, you can use online calculators.
If you are employed, you should be ready with two copies of recent pay slips. Required too is a group certificate for the last financial year.
If you are self-employed, copies of the last two years tax returns including full financials are required.
A car dealer may ask you to pay a deposit to have the car preserved for you. The deposit can be around ten to twenty percent of the total car loan amount. This is not a small amount hence you need to take time gathering the deposit needed.
What is available?
You must have knowledge about the available car finance package options available in the market. The main sources of car financing include:
- Car dealer finance
This is the loan provided by the car dealer. Car dealers allow you to customize your agreement to suit your requirements. Unlike other forms of credit firms, the interest rate is fixed. This means that the duration and amount you are supposed to pay per period never change. The process is quick and very easy. Approval is accepted within minutes and they handle all paper work for you.
- Personal contract purchase (PCP)
It is becoming a popular way of financing cars. They ask you for lower payments per month because the cars future value is calculated as the final payment. Compared to traditional loans, it is very cheap. If the car turns out not be worth the final value, you can take it back to the finance company with nothing to pay.
- Hire purchase (HP)
This is the very most traditional way to fund a car. It very popular and has been used over the years. One is allowed to settle the agreement any time and get a rebate of interest. There is a lot of security with hire purchase because the car acts as its security hence no risk to your home.
After you have looked at all the above finance options decide on the one that suits you best and settle for it. A good car finance option should give you the following:
Are they offering you a wide range of cars to choose from? This applies for either used or unused cars. A good deal should give you an opportunity to choose what you want. If otherwise then consider another option. How first are they going to agree to your plan and make the necessary arrangements? If this happens within hours, then it is a good deal. The plan should also be cost effective. Prefer a plan whose interest rates are fixed. This assures you of no increase in payments whatsoever.
Peace of mind is needed when entering a financial agreement. It is for this reason that you should choose a plan whose finance plans are protected by the consumer credit act. The company too needs to be licensed to provide credit services. Before delivery get, a complete explanation of the whole package and they should be adhering to strict rules and regulations. To get a good car finance plan in Southampton, the above should be strictly followed and put in consideration. You do not want to choose an option that will frustrate you in the future.