Under The Hood: The Basics Of Buying A Car

buying a car finance

Whether you are a solo business owner looking to make a few upgrades, or you are looking for your first ever vehicle, buying a car can be one of those intimidating prospects. After all, there are so many different ways to buy a car, and there are so many types out there, it can be a minefield. And if you’ve never done it before, or you haven’t got anyone to help you, how do you know if you’re buying the right one? Let’s see if we can help you.

The Different Types Of Payments

There are three main types now, Hire Purchase (HP), Personal Contract Purchase (PCP), and Personal Contract Hire (PCH). HP is where you buy a car on finance, where a loan is secured against the car. You pay a deposit, around 10%, and then you will make fixed monthly payments. PCP is similar to HP, but you make a lower monthly payment. But this can mean the total amount of money you will pay back is higher, but at the end of the term, you can trade in the car and start all over again, or pay what’s called a balloon payment, which is one last increased payment, and keep the car. You can do this if you like the car, especially if it’s a new Aston Martin DB11 V8 or a Porsche 911. PCH is where you pay the car dealer a fixed monthly amount but when the payments are completed and the agreement is done, you hand the car back.

Making The Right Purchase

It’s not something you should rush into. It’s important to find the right car for your needs. If you’ve got a family you will need a bigger car, like a people carrier, or if you are looking for something as a little runaround, there are plenty of options, like Mini Coopers, that can help get you from A to B. Making the right purchase also includes how much you’re able to maintain it. We have to remember that with every car, it’s quite an investment. But if you are thinking about getting a second-hand vehicle, you have got to be aware of the issues that can come with this. A lot of people mistakenly believe that buying a second-hand car is cheaper, which it is at the outset, but if we are buying something that’s incredibly depreciated in value, we’ll spend more money getting it fixed.

Saving Enough Money

When we’re making that initial purchase at the outset, it is a lot of money up front, especially if we’ve never made this type of purchase before. In many ways, it’s better to go into a dealership, not just because you’re better off getting a newer car, but the right car with the right dealership means you’ll have extended warranty, and they will look after you in many other respects. But if your credit score is an issue, this can limit the types of cars you can get. So if you can save enough money to pay a substantial deposit, this will make life easier.


1 Response

  1. […] Driving is something that we really wish we could live without. It’s something that takes so much of our money, so much of the time, yet we just can’t live without it. It’s as if all of those times walking around, getting lift of family members, and having to catch public transport never existed. […]

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