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If you’re planning on buying a car, you’re bound to have to take the different financial options available to you into consideration as soon as you’ve settled on a make and model that you’re interested in. Cars tend to be the second most expensive thing that people buy during their lifetime (after their home), so it’s not all too surprising that there are various options on the market to help make the process more affordable and achievable. Here are just a few of the different options that you can engage with!
Buying Outright
Of course, the majority of us would like to buy a car outright. If you were to do this, you’d hand over the money, have your car, and you wouldn’t have to worry about any further payments on it. But, unsurprisingly, very few people actually buy a brand new vehicle outright. This is a huge amount of money to fork out in one go, regardless of what vehicle you opt for. Buying outright tends to be something that people are more likely to do when purchasing a second hand car. Just make sure that you have fully checked the vehicle, conducted a history check, and done a test drive before actually passing over any cash for a second hand vehicle.
Leasing or “Hiring”
A second option that many people engage with when getting a car is hiring or “leasing”. You can see an example of this with the Vauxhall Astra 4 Year Personal Contract Hire Offer. In this process, you aren’t actually buying a car. Instead, you are paying to use a car for a set period of time. You’ll be the only user, but you will hand the vehicle back at the end of the day. Put simply, you will pay the depreciation on the value of the car while you are using it. Some dealerships will give you the option of purchasing the vehicle when you come to the end of your agreement, but however, you can’t guarantee this, so make sure it’s something you discuss before hiring the car if it’s something you’re interested in.
Financing
A third option is financing. This is great if you don’t have the money for the whole car up front, but you do want to be able to keep the car. When engaging with car financing, you will essentially enter a credit agreement. You pay the full value of the vehicle plus interest in monthly installments. You are likely to be in the agreement for a number of years, but it’s a great option that allows you to use and drive the vehicle while paying it off at your own pace.
There are plenty of options out there when it comes to managing your finances and you can buy a car in different ways to suit your financial situation. But these are three of the most common and the most popular. Hopefully, the above information has helped you to get to grips with them and has given you insight into which may be best for you!
