Loans - Finding the right car loan for you - 30/03/2008

When looking for a car loan it is a good idea to take as much time as you can finding out all your options, which are plentiful with so many lenders on the market. They can be found online, through banks of from dealers.


Personal loans are useful if you want a situation where you can decide on monthly payments and how long you need it for.

You might want to look at getting a personal loan. With a personal loan you agree solely on the monthly payments and length of period.

There is also hire purchase (HP) available from most car dealers. This would involve paying a deposit and then monthly payments over a negotiated time. You should always check what APR (Annual Percentage Rate) is.


APR is the percentage of the interest that you are expected to pay so seek out the lowest rate you can. The overall sum expected back is generally lower.

Personal Contract Purchase (PCP) is a car loan which ex-company car schemes can be financed through with the bonus of all inclusive of servicing and maintenance.

You will be expected to pay a 'balloon payment' at the end, which basically consists of buying the car outright.

As a property owner you should look at the equity of your house/flat as a way of buying a car, known as remortgaging. This would give low monthly costs although leave you paying more in the long term.

Personal Contract Hire (PCH) a rental agreement that is fantastic if you don’t mind owning a car outright. Deposits are usually either very low or nothing and monthly payments less than a PCP or HP. If you no longer want the car you give it back and stop payments.

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPATMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT
MISSING PAYMENTS WILL HAVE SEVERE CONSEQUENCES AND MAY MAKE OBTAINING CREDIT MORE DIFFICULT IN THE FUTURE.


Loan quotations are provided by Leadbay Ltd. Leadbay Ltd is authorised and regulated by the Financial Services Authority.