Getting a car on finance sounds like a good idea in theory however if you aren’t sure what you are agreeing to then you can find yourself in a whole load of debt quite easily. After all, finance agreements come with added interest that you wouldn’t have to pay if you bought the car outright. Here at V12 Sports and Classics we also offer finance agreements however we like to ensure that our customers know what they are purchasing which is why we are going to go over everything you need to know…
Credit Score
Lenders and financing companies will use your credit score in order to determine your suitability for a range of different loans. In fact, it gives them an indication of how likely you are to pay back the money you are being offered on a loan. When you apply for a car on finance the company will complete a credit check in order to see your credit history and following this they will make a decision on whether you are an ideal candidate or not.
Payment Methods
When you look into vehicle financing you may be shocked to discover that there are actually two different methods to choose from:
The Hire Purchase (HP) method is often thought to be the most simple way of taking out finance on a car. You usually start out by placing a deposit down on your chosen vehicle which is used to determined the monthly figure you will pay for the entirety of the agreement. At the end of a HP finance contract you own the car completely without any debts and are free to keep driving it or sell up.
On the other hand, The Personal Contract Purchase (PCP) method is slightly different. Just like a HP contract you pay a deposit in order to determine your monthly repayment figure however at the end of a PCP finance agreement you can either choose to pay a final sum to the company and keep the vehicle or you can choose to return it and end the contract. It is important to note that this means that you do not own the vehicle the entire time you are in contract with the company unless you choose to pay the optional finale fee.
Many people associate car financing with new models however it is actually possible to get finance on used motors for sale too. After all they perform just as well, if not better! To find out more information about car financing, get in contact with a member of the V12 Sports and Classics team today!