When looking for a new car, you may be considering whether to finance the purchase. There are a few different options for financing a vehicle available, and it is important that you understand each of them and can decide which is best for your circumstances. You will then be able to make an informed decision about which car finance companies offer the best deals and finance options for you. To get you started, we have put together this guide to help you select the best provider for your needs.
Which Are The Best Car Finance Companies?
Every car finance company is different, offering various deals and requiring that a range of criteria is met, so it is difficult to say which companies are the best. There is no one size fits all, and different providers work for different people.
For example, there may be a car finance company that is better suited to personal customers, or one that is designed to help business customers. There are providers that offer finance options for those with low credit scores, and some that do not offer bad credit finance at all.
We recommend that you talk to two or three independent companies to explain your requirements, your financial situation and learn more about what they can offer you.
What Are The Best Car Finance Rates?
If you want to find the best rates to suit your budget, you will most likely find them online. Many online lenders also offer car finance calculators, which display how much you will be repaying each month, leaving out any guesswork. However, it is worth checking whether the rates offered online are for car finance rather than personal loans to avoid any confusion.
While you may find some of the best rates online, you may need to negotiate the best price for the car that you are purchasing. Vehicle brokers typically have better buying power and the ability to offer discounts, so it is always worth it to ask, even if it is just a lower delivery cost you manage to negotiate.
What Are The Best Car Finance Options For Personal Customers?
For personal customers, there are three types of car finance that are recommended:
- Hire Purchase (HP) – secured against the vehicle with regular monthly repayments and you are guaranteed to own the car at the end of the term.
- Personal Contract Purchase (PCP) – secured against the vehicle with regular monthly repayments. You will only pay the depreciation value of the car and there is the option to purchase the car at the end of the term.
- Personal loan – allows you to purchase the car outright and is not secured against the vehicle. You will pay monthly, usually with interest, and own the car from purchase. This will either be secured against an asset, such as your house, which will be repossessed as collateral if you miss repayments, or unsecured depending on your credit rating.
What Are The Best Car Finance Options For Businesses?
Most businesses opt for a lease contract instead of getting vehicles on finance. However, if a business does require a vehicle on finance, they may choose a Contract Purchase or Hire Purchase.
Hopefully, this guide has helped you to make an informed decision about which car finance company would be best for you. If you are still unsure or are worried about meeting monthly repayments, please seek financial advice before signing into an agreement.