Car finance Guide
This Guide to car finance can help you understand the do’s and don’t s of taking out finance to buy your next car. Knowledge is power when searching for the car loan or lease that suits you best
Car finance explained
Before you apply for finance
Car Loans and Finance Guide for Young Drivers
How to apply for a car loan – Prepare a budget before applying for car finance to see how much you are able to afford, there are the monthly repayments on the car loan as well as the entire car running cost to consider. When you do buy a car on finance you are in reality making two purchases, the car, and the loan. Make sure you get a good deal on the price of the car as well as the best APR rate available on the loan.
Credit Rating – Any time you apply for a loan or finance the Lender will check your credit score before making a decision. Find out your credit rating before you apply for a loan.
Car finance options for young drivers – What do all these different loans mean? PCP, HP, PCH, Personal car loan, Guarantor car loan. Find out the best car finance option for you.
Personal Contract Purchase (PCP) – With a PCP Car Loan young drivers can return the keys when the agreement ends and the repayments are less than with HP car finance.
Car Hire Purchase (HP) – At the end of an HP agreement you will own the car, but until then you are not the owner and cannot sell the car without the Lenders permission.
Car Lease Deals (PCH) – With a Young Driver Car Lease you should be able to drive away in a new car because with leasing (or renting) the monthly repayments are less than for other forms of car finance. However you will never own the car and you will have to return it at the end of the car rental agreement.
Personal Car Loan – Young drivers applying for a personal car loan will need a good credit rating because personal loans are unsecured and you will own the car straight away.
Guarantor Car Loan – Who can act as Guarantor on your car loan? Everything you need to know about a Guarantor loan! Suitable for young people with a poor credit rating or who have not applied for credit before.
Car Finance Jargon – Do you know your car finance buzz words? What’s a Balloon payment? Do you know what a GMFV is? Be wise and do your homework before applying for a car loan.