Car finance is a type of loan that helps you to buy a car. Car finance is available from a variety of sources, such as banks, credit unions, and specialist lenders.
There are two main types of car finance:
1. Hire purchase: With hire purchase, you borrow the money to buy the car from a lender and then pay this back over an agreed period of time, usually between one and five years. At the end of the agreement, you own the car outright.
2. Personal contract purchase: With a personal contract purchase (PCP), you also borrow the money to buy the car from a lender. But with a PCP, you only pay back a portion of the car’s value, and at the end of the agreement, you have the option to buy the car outright (known as the ‘balloon payment’), return it to the lender, or trade it in for a new car.
The main advantage of car finance is that it can help you to spread the cost of buying a car over an agreed period of time, making it more affordable. It is also flexible, and you can usually choose the length of the agreement and the amount you want to borrow to suit your budget.
If you’re thinking of taking out car finance, it’s important to compare the different options available and make sure you understand the terms and conditions before you commit to anything. It’s also a good idea to speak to a financial advisor to get impartial advice on which type would be best for your individual circumstances.
At Mondial Cars, we offer a range of options to suit your needs. Whether you’re looking for hire purchase, personal contract purchase, or another type of car finance, we can help. Contact us today to find out more, or check out what’s in stock.