New Car Finance

There are two main types of new car finance

Which one is right for you depends on your own individual circumstances and preferences.

Hire Purchase (HP): This is a simple and popular option. It involves you hiring a vehicle from a finance company for an agreed time period. After you’ve made the final payment, you own the vehicle outright. The lender can repossess the car if you miss payments.

Personal Contract Purchase (PCP): You pay only the depreciation of the value of the vehicle, rather than the full value. The monthly payments will be lower. But, at the end of the agreement, if you would like to own the vehicle, you’ll have to pay a lump sum. The lender can repossess the car if you miss payments. PCP agreements generally mean it is easier to change cars.

There are a lot of things to consider when looking at new car finance options, and to make your application more likely to be accepted.

The lender will look at:

Credit Score: Your credit score plays a pivotal role in determining the terms and interest rates of your new car loan. A higher credit score typically leads to better terms.

Deposit: While some lenders offer deposit free options, a deposit can reduce the total amount financed and lower monthly payments.

Loan Term: The loan term affects monthly payments. While longer terms result in lower monthly payments, they can also lead to higher overall interest costs.

When comparing new car loan options, you should consider all the costs.

These include:

Interest Rates: Interest rates can significantly impact the total cost of the loan. It’s essential to compare rates from different lenders to secure the most competitive option.

Additional Costs: Consider other expenses associated with new car ownership, such as insurance, maintenance, and fuel. If you buy a new car you won’t need to get an MOT for the first three years, which is a potential saving.

When you are shopping around for a new car, there are a few tips to consider that could potentially save you money:

Research and Compare: Take the time to research different lenders, their terms, and interest rates. Compare offers to find the best option for your financial situation. Fortunately, the CarMoney ninjas can handle this part for you.

Negotiate Price and Terms: Negotiating the purchase price of the car can lead to more favourable finance terms.

Be Mindful of Depreciation: A new car’s value depreciates rapidly in the first few years. This should factor into your decision-making process.

New car finance provides individuals with the opportunity to own their dream car, while spreading the cost.

Keep these simple tips in mind, and you will be able to drive your new car, safe in the knowledge that you got the best new car finance deal you could.

Get a quote today or contact CarMoney.