If you want the freedom and flexibility a car provides, you have three financing options. You can borrow the money to buy the car by Hire Purchase or via a Personal Loan or use your savings.
Choosing a Loan
If you have decided not to use your savings, the challenge is finding the best credit agreement to suit your needs.
Under a hire purchase (HP) agreement you are technically hiring the goods until you pay for them in full. A number of repayment options are available. You can spread your fixed repayments over two to five years. At the end of the loan agreement, you can either pay the outstanding amount and take full ownership of the car or sell the car and use the money to pay off the deferred amount.
A lump sum will be loaned in return for agreeing to make regular repayments. Fixed or variable interest is charged on the amount borrowed. This interest charge is expressed as an APR (annual percentage rate). The APRs will vary dependent upon the amount of the loan. When you borrow money on a personal loan you can use the money to make your own purchase and you will legally own the car from the date you make the purchase.