5 Ways To Buy A Car – Which Is Best For You?

If you’re in the market for buying a new car, you’ll be pleased to know there are more ways than ever to do so! There are a number of ways in which you can buy new and used cars and the right buying option may be determined by your budget and ownership preferences. In general, buying a car with cash is the best and most cost-effective way to make your purchase but you may be limited by budget. Explore the different buying options below.

A lump-sum cash payment.

They do say cash is king and when it comes to car buying, it can be true. Being a cash buyer means you can get your car from a private seller or dealership, and you may even have more room for negotiating with cash. Buying a car outright means there’s no ineptest to pay, no monthly payments and you’ll own the car from the start of the agreement. The only thing really stopping drivers from buying a car with cash is having enough money saved up.

Hire Purchase car finance.

Hire Purchase car finance is an easy way to spread the cost of your next car into equal monthly payments. Hire purchase is the easiest-to-understand finance deal. There can be a deposit to pay, or you could be offered a no-deposit car finance deal too. You split the cost of your chosen car and any interest or fees into equal payments over your agreed term. This means your payments won’t change and by the end of the deal, you’ll have paid the loan off. It is a secured loan which means the lender owns the car during the agreement but once all payments have been made in full, the car is yours to keep.

Personal Contract Purchase.

Personal Contract Purchase (PCP) is another type of car finance and is really popular in the UK. PCP deals can offer low monthly payments and the flexibility to change your car more often. However, a lot of the loan value is held in a balloon payment which needs to be paid if you want to keep the car. It’s a secured loan like HP and you won’t own the car during the agreement. If you don’t want to keep the car, you also have the choice to hand the car back to the dealer or get a new car on PCP and use the value towards the new loan.

Personal loans.

A personal loan is different to HP and PCP finance deals because it’s an unsecured loan. This means there’s no collateral used to secure the loan. Instead, you apply for a set amount from a lender and if approved it gets deposited into your bank account. You can then buy a car like a cash buyer and make monthly payments back to the lender! Personal loans can offer low interest rates and may only be offered to people with the best credit scores.

Leasing a car.

Leasing a car is like hiring a car for a long period of time. It is an option for getting a car but it’s worth noting you will never own the car and will return it back to the lender at the end of the term. You’ll often pay a deposit and then pay fixed monthly payments over a number of years. You’ll have to set an agreed mileage and stick to it whilst you drive the car. If not, it can incur excess charges you’ll need to pay. Many car lease deals also come with service and maintenance included in the cost, so you don’t have to worry.