Buying a car is an important activity but unfortunately few of us have enough disposable cash flow to buy a vehicle outright. Instead, we use car finance to aid with our purchase – but what are your options? Honda UK has a fantastic choice of new car deals to make your vehicle purchase hassle-free.
To give you a better idea of the ways you can make buying a car more affordable, here’s a handy list of the most popular vehicle financing options:
Hire purchase agreement
A hire purchase agreement operates similarly to a normal personal loan but is distinguished by one major difference. The car is not technically owned by the consumer until they have repaid the full loan amount.
After paying a deposit and then continuing with monthly installments, the purchaser will finally become the owner once the last payment is made. This means that the lender can take the car back if the borrower can’t make the payments or falls behind. The precise deal offered will depend on the dealership but they can often be a good way of ensuring that you can afford the car that suits you. Visit the Honda website to look into their Hire Purchase Scheme, which is designed to help you fit a vehicle purchase into your personal budget.
Personal loan
If you’re in the market for a new motor, you’re probably on the lookout for top-quality features: fuel efficiency, clever use of space and an attractive exterior. Cars from Honda have all these and more, and, most importantly, they’re also the economical choice. See the full range at Honda.co.uk. For help with financing your new sleek set of wheels, one of the most popular options is taking out a personal loan. This loan could be offered by the dealership you’re buying from, though it is always worth looking at personal loans from other sources to ensure that you’ve got the best deal. It’s really important that you understand the specifics of any personal loan you take and calculate exactly how long it will take to pay off.
Personal contract purchase
A personal contract purchase (PCP) has become an increasingly popular way to finance the buying of a vehicle. The agreement works by establishing a value known as the guaranteed future minimal value (GFMV), which is used as a benchmark. By making monthly payments, consumers will eventually reach the point at which all there is left to pay is the GFMV. They then have the choice to pay the final portion and keep the car forever, return the car to the dealer or part-exchange it for a new vehicle. This type of finance is now very common.
Car leases
A number of drivers are now moving away from the idea of ownership and concentrating on leasing their vehicles. While this gives consumers some flexibility, it doesn’t afford the same sense of security as outright ownership. However, this may be the right option for you if you aren’t ready to commit to the full purchase of a vehicle just yet. If you need a car for business purposes, you might want to look into Honda Contract Hire, an operating lease that allows your business to avoid the large initial expenditure a car purchase involves.
This article is in association with Honda UK.
