According to the UK media, the economic recession has come to an end; for the time being. This is great news for the UK economy and UK consumers. What it means is that the deals are still there, but lenders are much more readily available. So when a deal actually arises, consumers can jump on it straight away. There is no doubt that one of the best ways to jump onto these deals is to get some kind of car finance. There are plenty of options to consider, so donâEUR(TM)t just choose the first one!
Is Purchase Finance The Right Way Forward?
Most people will go for the most popular method of purchasing. They will put down a deposit that usually equates to around 10%. After this, they will be committing to monthly repayments, which are usually scheduled over 12-36 months. After this point they will own the car. The only problem with this is that depreciation during the first few years of a brand new carâEUR(TM)s life is actually really high. After paying off the loan, the buyer might find that the car is actually worth 50% less. If they wanted to sell it for a different car, they will lose out considerably.
Leasing And Purchasing
The next most popular option is going to be the lease purchase option. The reality is that this gives people options in the long term. They put a small deposit down on the vehicle. They agree a term, which could be 12-36 months. When this period is up, they can choose to pay off the bulk of the car and own it, or they can opt out. This is not necessarily the cheapest option; it is the option that gives people the most flexibility, to a point where they hardly need to worry about depreciation.
Buying Second Hand
Not every new car purchase using finance needs to be a brand new car. Remember, there are plenty of dealerships that are offering second hand cars to their consumers. This might be a good option, as mentioned above; cars lose 50% of their value within 4-5 years. By purchasing a car that is 5 years old, or older, the consumer will have missed the main depreciation. Although the car will still lose value, it wonâEUR(TM)t be anywhere near as much as if they bought the car brand new. Consider this before actually making a new car purchase!
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Is Purchase Finance The Right Way Forward?
Most people will go for the most popular method of purchasing. They will put down a deposit that usually equates to around 10%. After this, they will be committing to monthly repayments, which are usually scheduled over 12-36 months. After this point they will own the car. The only problem with this is that depreciation during the first few years of a brand new carâEUR(TM)s life is actually really high. After paying off the loan, the buyer might find that the car is actually worth 50% less. If they wanted to sell it for a different car, they will lose out considerably.
Leasing And Purchasing
The next most popular option is going to be the lease purchase option. The reality is that this gives people options in the long term. They put a small deposit down on the vehicle. They agree a term, which could be 12-36 months. When this period is up, they can choose to pay off the bulk of the car and own it, or they can opt out. This is not necessarily the cheapest option; it is the option that gives people the most flexibility, to a point where they hardly need to worry about depreciation.
Buying Second Hand
Not every new car purchase using finance needs to be a brand new car. Remember, there are plenty of dealerships that are offering second hand cars to their consumers. This might be a good option, as mentioned above; cars lose 50% of their value within 4-5 years. By purchasing a car that is 5 years old, or older, the consumer will have missed the main depreciation. Although the car will still lose value, it wonâEUR(TM)t be anywhere near as much as if they bought the car brand new. Consider this before actually making a new car purchase!
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