New Car Finance - A Number Of Options
The automobile market is looking up with new cars being introduced and consumers being wooed with many attractive offers
. This is a good time to go in for that new car you always wanted to have. The prices are much lower than what they were a year ago, especially on famous Japanese models. Also, new car finance are being offered by many manufactures for a range of models.
The purchase of a depreciating asset like a vehicle should ideally be self funded. Why would you want to pay additional interest costs on a new car finance scheme and add to your financial burden, especially when the asset is a depreciating one?
But since that is not always possible and given the number of competitive new car finance models available, you should not wait any longer and make the dreamed purchase.
What are the options available?
a)The first one is the dealer finance option, where the dealer offers you the hire purchase, personal contract purchase and other such plans. Invariably, though these are often expensive, you may choose one of them after negotiating to get a bargain. You may be able to get some extra benefits in the form of free accessories if not anything in cash from the dealer and also would be able to tie up the deal at one place.
b)A personal loan is another option. Though it is becoming difficult to get one, some of the major lenders as well as banks are offering this facility, albeit at a higher rate of interest. This comes in handy if you are making your purchase from a private party.
c)The mortgage top up is another choice you can exercise if you are really tight on funds. Your mortgage would get extended proportionately based on the amount you are borrowing and though the monthly payments will not go up substantially, over time you will end up paying much more. Avoid this if you can.
Dont forget to understand the terms
The above options are all fine provided you have clearly understood the repayment obligations you will have to adhere to. Before signing on the new car deal, ensure that there is provision for you to make overpayments so as to reduce the liability and interest costs on the amount that is remaining. Any prepayment options without a penalty clause or levy should be pursued as it gives you the flexibility of settling the new car finance amount at your convenience.
New cars are being sold under different sales packages attractively bundled to entice customers. The new car finance models that are offered need to be taken from reputed lenders and you should not take on anything that is difficult or stressful for you to follow.
by: Ted Brumby
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