There are times when a car is just not worth fixing anymore. After a while, a car breaks down that much that it would just work out better to buy a new one – and it may just help you save money. However, the question is how to afford a new car, whether you buy brand new or whether you buy a secondhand one. The answer to that is car finance.
You have a handful of options when it comes to getting finance for a car. One of those is a car loan, which you can usually get through your bank. Your bank will usually be able to offer up to £10,000 for a loan, which you then agree to repay over a set amount of time of between three and seven years.
The main benefit of a loan is that it is usually unsecured, so you will own the car outright and will be able to sell it if you find that you struggle to make the repayments over some time. Another benefit is that there is no need to put down a deposit for the money, so no need to worry about saving up beforehand.
A second option available is a hire purchase. This is where you get your finance through a car dealership and make the payments over a set number of months. At the end, you make a final payment or can choose to not keep the car – you then make a small payment to cover any damage and the mileage that you have done.
The benefit of a hire purchase is that it will cover new cars off the lot, which is something that a bank loan cannot usually do. This is because you will get the total amount for the car minus the deposit that you will have to put down. Another benefit is that you do not need to make the last payment if you decide that this is not the car for you in the end.
