Finance is a major consideration that most people evaluate before purchasing cars. Used car finance proves a challenge to prospective vehicle owners, especially those that do not have money to buy new cars since they are unaware of the various financing options in the market. This should not be the case with the numerous capital models available to buyers to purchase vehicles.
1. Dealership Finance – Most used car dealerships provide finance for their clients at favorable rates. If the customer wants, they can arrange loans for you through accredited banks. However, this is pegged on your credit history. Even better, you get to pay lower interest rates with a one-off payment at the start or end of the finance period.
2. Commercial Hire Purchase – The model is an effective approach to acquiring a used car where the financier purchases the vehicle on behalf of the motorist. This means that ownership is held by the party providing finance. Payment is done on a monthly basis for an agreed period of time and rate, after which the car is transferred to the user. The down side is that the interest rates payable is high.
3. Loan – In this model, the facility is divided into two that is secured and unsecured credit facilities. In the secured loan approach the client is expected to provide an asset that will act as collateral for the credit facility. Notably, the approach has benefits that include a lower interest rate. The unsecured loan is offered to a customer who qualifies by using their credit ratings and savings records.
4. Personal Lease – Personal leases are another form of finance that buyers can adopt to acquire used vehicles. Normally, the customer is facilitated to buy the car and pays money on a monthly basis for an agreed period. The borrower can decide to purchase the vehicle at the end of the contract or renew the agreement.
Used car financing has seen tremendous growth in recent years with favorable and creative investment models been developed to cater for customers. Clients should evaluate the best finance option that suits their circumstances or needs while buying used vehicles. Naturally, interest rates should be the central factor in deciding, which approach to adopt in buying used cars to avoid expensive loans. Buying a used vehicle has never been easier for either first-time buyers or individuals who want another car.