Good Buy or good Bye, Its Your Credit

By: Onome Okwuosa

Hardly any of us earn enough to purchase a car outright, for that reason the widespread availability of car finance which is essentially a loan has proved to be a blessing. Without it we would return to the era of painfully saving until we could afford to make the purchase and then that car would be fixed-up and patched up repeatedly until it quite literally died of exhaustion.

Rather than that, the option to regularly change your vehicle is one open to even those on minimum wage! On a social front one can't conclude whether this is a good or a bad thing however choice can always be described as a positive so whether you want to take advantage of the low monthly payments associated with a PCP term or maybe you prefer the finality of a HP agreement, either way knowing there is an option out there for you is a comfort to all. This is the third instalment of this four-part symposium and will be looking into the benefits of both Lease and Credit purchase options.

It has been noted that the benefits of taking out a PCP agreement include lower monthly payments, as well as the flexible options when you come to the end of your term. A PCP agreement provides the option to hand the car back at the end of the term and start all over again with a brand new shiny, pretty vehicle which no doubt makes one feel all shiny and pretty whilst driving it. Then again maybe the sentimental attachment you have formed with your four-wheeled Betty denies you the option to even look at another vehicle and so you re-finance the deferred costs so you and Betty can remain as one.

For those of you who have had your eyes trained on a specific Betty in the car-lot for some time and know categorically that this is the car for you and you are going to be together forever and ever, HP would prove to be the best option. What if you want to combine the benefits of the two finance options, you like the idea of low monthly payments but don't want to be restricted to a mileage contract? What if on top of those benefits you want to defer the residual value of the car until the end of the term knowing you'll still have the option to re-finance if need be? If you like the structure of a personal contract purchase but have your eye trained on a more costly car then Lease/Credit Purchase may be the option for you.

By deferring the residual value you greatly reduce your monthly payments making that dream car all the more affordable! Unlike a PCP agreement you do not have the option to return the car at the end of the term, the responsibility to satisfy the final payment either through additional finance, cash payment or by part exchange is down to the customer. The terms are usually spread out over 2, 3 or 4 years and the option to settle the outstanding amount can be made at any time, a great flexible option for those whose jobs offer large bonuses. Similarly for those who use their car for work and need the limitless mileage benefit as well as wanting their vehicle to reflect their accumulated wealth without actually shelling out the hard cash up front this option is sterling!

There are a number of ways to make your monthly payments lower, the first way is to put down as large a deposit as you can financially afford, by doing you reduce the total amount owed which in turn will reduce the deferred amount and most importantly the monthly payments.

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