Car finance is a very big industry, and there are quite a few types of loan you can take out when buying a car. Most of us rely on finance when buying a car, and with that in mind, here are 4 different types of loan when looking to buy a car.
- Standard Finance Loan – The amount you wish to borrow is divided into monthly payments for a specific period of time. It could be anything from 12 months to 5 years, depending on the borrower, and once an agreement has been made, the borrower begins the monthly repayments not long after the car purchase. This is quite a rigid type of loan, with a monthly figure that includes interest.
- Personal Contract Purchase – PCP, as it is known in the trade, is a loan that offers more flexibility, as you can defer some of the repayments until the loan period expires. This is ideal for the self-employed person who is unsure of their monthly income. If you are looking for reliable prestige cars in Plymouth, there are online loan providers who can find a loan that best suits your lifestyle.
- Motor Loan – Very similar to a personal loan, with the exception that the car is not registered in the finance company’s name when the agreement comes into force.
- No Fees Loan – This would involve high monthly payments for a shorter period, making it ideal for those with a high credit score. Interest rates are lower than with any of the other loan types, and this is suitable if you have a lot of disposable income every month.
Talk to your local finance company to see the various types of car loan packages they have.