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Compare Car Finance With Money Pug
- Buying a new car can be exciting. You have probably spend hours pouring over the details of the various makes and models, deciding which car is right for you. But few people spend as long looking at the car finance options available. Whether you are buying new or second hand, it can make good financial sense to look into all the different options for borrowing before you make your mind up about how to pay for the vehicle you have chosen. You will often find that a hire purchase agreement is not the best option when buying a car.
- Money Pug can help you look into all the different options available for car finance. We make the whole process much more easy and straightforward, so you can avoid any hassle and spend the time instead looking forward to driving your new vehicle. Don’t end up paying over the odds for your new car! Compare car finance offers with Money Pug today to see how much you might be able to save.
What Should I Consider When Looking for Car Finance?
- Before you sign on the dotted line, it is important to consider all the following factors:
- Can you really afford the monthly payments?
- What interest rate will be charged on the car finance?
- What charges are associated with the car finance contract?
- What size of deposit will you have/ require upfront?
- What mileage limits are imposed by the provider?
- How long would you like to keep your new car?
It might be a good idea to get a credit check before applying, so you can see how likely it is that you will be accepted for car finance.
What Types of Car Finance are Available?
Hire Purchase (HP)
A hire purchase plan typically involves putting down a deposit up front and then paying a set number of monthly instalments. You can drive your vehicle from the beginning of the agreement, but it will not belong to you until all the monthly payments have been made. If you fall behind and cannot make your monthly payments before you have paid off a third of the price of the vehicle, the provider has the right to repossess the vehicle. If you have paid over a third, the provider must get a court order so as to make the repossession. If, after the vehicle is sold at auction, your debt has not fully been covered, you will be liable for whatever debt remains. Remember that, by law, you will not be able to privately sell your vehicle until you have paid off the final instalment.
Personal Contract Purchase (PCP)
Another option for car financing is the personal contract purchase. With this sort of deal, you will pay monthly instalments and, at the end of the deal, will have the option to either return the vehicle or purchase it for the price agreed at the beginning of the arrangement. You can also opt to use it as part-exchange on a new PCP agreement. If you are up to date with payments, you should not have to pay anything else at the end of the agreement as long as you have not exceeded your mileage and the car is in good condition.
Personal Contract Hire (PCH)
With a personal contract hire agreement, you will be leasing a car rather than buying it. At the end of the contract period, during which you will have made monthly payments, you will hand back the car and, if you want to, enter into a different agreement for a new vehicle. Bear in mind that these deals often call for a large deposit up front, like the option above, and you will be responsible for sticking within a certain mileage and for wear and tear and damage to the vehicle.
A low-rate loan is almost always a better alternative than hire purchase options for car finance. One of the things that makes this an appealing option is that you can sell a car to pay off a personal loan if at some point it is impossible for you to continue the repayments. This makes getting a personal loan a far less risky and more flexible way to finance your new vehicle. You can get the best personal loan rates on loans of between £7,500 and £15,000 so this is the best option especially for those looking to borrow an amount between those two figures. If you need to borrow a larger amount, you may like to consider a secured loan, which uses your home as security and which may offer better rates. Remember, however, that your home will be at risk if you do not keep up the repayments.
0% Credit Card
If you are buying a cheap second hand car then you may find that a 0% credit card will be the best choice to finance your vehicle purchase. Of course, the best deals will only be available to those with good credit scores. It is also worth noting that it is important to be disciplined, so you pay off the borrowing in time and do not incur high interest rates at the end of the 0% period.
Car Finance FAQs
- Cars can be expensive so when buying one, it is vitally important that you don’t end up paying over the odds, or more than you need to pay. Make sure you look at the total cost of credit when using Money Pug’s handy comparison service. This figure can help you