Payment Options

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Car Payment Options

The following 4 options will help you get the best finance package for your needs.

Unsecured Loan

Buying a car outright with an unsecured personal loan can be a convenient way of making your purchase. Unsecured loans are normally repayable on a monthly basis, although you can now pay some on weekly basis at a fixed rate of interest.

They are not linked to any security, such as your property, hence the use of the term unsecured. The upshot of this is that the lender will have little option but to sue you to recover their money in the event that you fail to repay the loan in full. Remember to look at the rates closely as some car sales companies will make more out of the loan than they do from the car.

This is why they try to pressurise you into taking their finance. Have a look at our personal loans advice for further help and have a look at our top 10 UK loans providers.

Hire Purchase

If you buy a car on hire purchase, you will only own the car after the majority of the credit has been repaid. There is one other thing to remember with hire purchases - you don't even have to buy the car outright. So long as you have paid at least 50%, you will be able to give the car back and you will owe nothing else.

Personal Lease

This is just a glorified term for renting the car. You will not have to worry about M.O.T's or repairs as this is all included in the lease agreement and at the end of the lease, you return the car. One important thing to look for is the amount of miles you are restricted to each year so make sure it is enough for your needs. If you go over the mileage they will charge you around 5p per mile, so it can be very expensive.

Part Exchange

If you have a car already, give it a good clean inside and out when you go to part exchange it. This can make a large difference to the price the dealer will give you. Most places will part exchange your old car against another vehicle. You are often best trying to sell your car privately first, as you will normally get more for it.