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How to Choose the Right Kind of Car Finance

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Financing a Car

When you are planning to buy a new car you might think that paying for it comes down to a straight choice between paying for it in cash or getting a bank loan. These are still options but with more sophisticated types of car finance deals around now you might find that there is another option which suits you better.

Keep Your Options Open

When you go to find out more about cars on finance you might be interested in the type of deal which lets you keep your options open for as long as possible. You will typically pay a deposit and then carry on paying monthly repayments for a fixed period of time. After this you can part exchange the vehicle for another, keep it or hand it back. The smartest part of this kind of deal is that the value of it at the time you make your decision is decided at the start. This means that market conditions could make it a very easy decision as to whether you keep it or not. It could be a great way of buying a car if you like to control your finances and get the chance to take the important decisions which affect them. Honda offer a great deal called the Honda Hire Purchase scheme where you pay a set amount each month and then have the option to pay a lump sum at the end and own the car. If you don’t want to own the car you can simply give it back.

A Traditional Loan

As we mentioned at the beginning, the option of a conventional loan is still one of the options which first spring to mind. This is where you pay a fixed amount each month and at the end of the repayment term you own the car. It is a simple kind of agreement which would suit someone who is happy paying their loan back each month without having to think about anything else.

Contract Hire or Lease

If what you want is to always have a great car to drive and no hassles then a contract hire or leasing deal could suit you. With this kind of arrangement you pay the agreed figure each month and then hand the car back at the end of the term. It is a popular way of being able to get hold of a classy car without committing yourself too much or risking getting bored by driving the same vehicle for too long. This is typically seen as the type of deal which business users take out but it can also be ideal for someone who only wants the car for personal use.

Pay In Cash

Finally, it is easy to forget that some people still buy their cars outright with cash. These days it is an option which is open to fewer of us than before and even those people with the cash in their bank account often prefer to take out one of the previous financing methods. After all, If you can find a way of financing the vehicle which suits you then there are bound to be plenty of other things you can do with the money instead of paying for the car in one go.

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