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Buying a new car? Buying a quality used car? What's the chances you have enough cash at hand? You may need to look at the different car finance options available. Every country has their own unique set of options for clients from buying cash to taking a personal loan or relying on a HP. In the United Kingdom you have a few options available to you, though there are some very important factors you are going to want to take into consideration to ensure you get the best deal based on your budget and unique requirements.
The first option is to pay cash. If you have enough cash saved up then this is always the best option. Though bear in mind with cash, you are limited on the amount you have available and a younger model vehicle is going to cost more than a much older one. Ideally you want a younger model with less mileage so that you know you will have a quality car you can use with confidence for a good few years before it needs replacing.
The second option when it comes to car finance UK is a personal loan. Though bear in mind that high street banks are not that willing to provide loans any more and you need a stellar credit history and cash in the bank in order to quality. A loan is a slower process and you will need to meet with the bank manager and provide a host of paperwork. The good thing is that a personal loan can cover the full cost of the vehicle and you will have monthly repayments that are fixed, so it's easier to budget for.
The third and most popular option is car finance UK. This is quick and you can get your answer without delay. You will need to pay a small deposit, which is usually only about ten percent of the sales price, so this is something to bear in mind. You get flexible repayment terms and you can decide how long you want to pay back for, the longer you choose the lower the repayments are, but remember the interest will increase. You also get a fixed interest rate, which is beneficial in the long run. Car finance is also often available to you if you have a good or bad credit past.
Now once you have made your decision, there are a few others things to consider when it comes to car finance UK starting with the monthly repayments. You need to ensure you can afford the repayments on the same date each and every month. You don't want to miss a payment, even by mistake, as this could result in you not only lowering your credit score, but if you miss a number of payments the car could be repossessed.
Next you want to compare the total cost. When buying a car on finance, you will pay interest which will increase the cost of the vehicle. It is worthwhile to shop around, get a few quotes and then identify the one which will cost you less in the long run.
Be sure to check if there is a penalty to settle the debt early. Most car finance UK providers will let you settle early if you have the cash at hand for a nominal charge. You need to identify the settlement amount and then identify if it is worthwhile just paying off monthly or if you should consider settling so that you don't have that repayment amount coming off your bank each month.
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