What Choices Do I Have For Used Car Finance?

While it can be nice to walk into a car showroom and choose a brand new model of vehicle with no mileage on the clock and the smell of new leather evading your nostrils, many cannot afford this luxury and choose to buy a good quality used car. There are many bargains to be found if you shop around and used cars come with various price stickers based on their age and condition. If you are buying a used vehicle and do not have the cash to hand over then you need to consider how to get used car finance. So what are your choices?

Hire purchase - this may be suitable if you are buying from a dealership, specialising in selling quality used vehicles.

A personal loan - you could look into this option if you want to buy a car from a private seller or if you wanted to have cash already in your pocket when you look for your vehicle with a dealership.

Points you may wish to consider

With both options of used car finance, you may be able to spread out the cost of the vehicle over a certain period. This may usually be in the region of 1 to 5 years and could make buying a car more affordable.

When considering how long to take your loan over you may want to spare some thought to the fact that the longer you take out the loan, the more you will pay in interest and so the more you will pay in total.

If you chose to take hire purchase, you may have to find money for a deposit for the vehicle. If you are struggling with money this could mean you might be better off looking for a personal loan.

If you can afford to pay even a small deposit this could mean you have to borrow less money and it could work out cheaper when you take interest on the loan into account.

Should you choose to take a hire purchase agreement the interest rates might work out more than if you had shopped around for a personal loan for your used car.

There are specialist websites that take the hard work of finding a car loan away as they will search for the best deal for you based on your circumstances.

If your credit rating is poor, you may stand more chance of obtaining a loan yourself compared to risking the dealer will allow you hire purchase.

If you take out hire purchase as your used car finance, the vehicle will not be yours until you have made the very last payment on the agreement so you could not sell it.