Ways You Could Take on Used Car Finance

There are two popular forms of credit available to you if you want to buy a used car. The most suitable may of course depend on such as your credit rating and where you intended buying your vehicle. Used car finance can even be found if you have a less than perfect credit score and even if you have been turned down for credit in the past with lenders.

The plus side to taking hire purchase - if you are buying your used car from a dealer then you may want to consider the hire purchase deal they offer a used car finance. Many believe this to be one of the easiest ways to borrow as you find the vehicle you want and then go and sit in the office with the salesperson while they work out how much you may have to pay each month. If your credit file is excellent, you may be able to get a great rate on the interest and may even be offered 0% finance for a period.

The downside to taking hire purchase - the interest rates of hire purchase may work out more than if you had chosen to find a personal loan. You may be asked to put down a deposit on the vehicle to drive it home and if money is tight this could be impossible. In addition, you may have to bear in mind that until you had paid off the final instalment of the loan the car may not be yours. You may not be able to sell the vehicle or trade it in for a newer model until you had paid off the hire purchase agreement.

The plus side to the personal loan - if you take out a personal loan you may be able to find an attractive rate of interest. You could compare the rates online and over the phone with lenders, you could go with a specialist website and allow them to search and find the best deal for your circumstances. There are specialists that will allow those who have a shaky credit rating the chance to borrow, which you may not find with the car dealership. You may own the vehicle and be able to sell it at any time, providing of course that you continued meeting your loan repayments or paid the loan up.

The downside to the personal loan - usually you will be able to choose how long you want to spread out the used car finance. This may be between 1 and up to 5 years, with of course the longer the term the cheaper the repayments each month. If you take a loan over the longer term and find you can pay it off early there could be a one off fee to pay. Therefore, you should check this before taking out the loan so there are no nasty surprises in store.