Car finance options are the different ways through which one can actually buy a car. We would now look at some of the facts relating to car finance:
Before deciding to go for a particular option, you must be aware and clear of the following things:
1. What is the type of car you willing to purchase?
2. How much money are you willing to or can you spend toward the monthly payments for the car?
3. What is your credit history? Do you have any unsettled dues in your names? Because if you do then there would be very little chances of you getting a loan and if at all you get a loan that would be at a very high rate of interest.
After having looked into all these things, you can go in for the following car finance options:
1. Lease purchase option: In this kind of a set up, you actually purchase the vehicle for a stipulated period of time and after that period, the lessor can take back the vehicle from you and sell it to some another person. If you want you can further extend the lease. There are no monthly or quarterly payments made by the buyer in this setup. He pays the entire amount at the time of getting the car on lease. And it is the duty of the buyer to take good care of the car during the lease period and if he fails to do so, then all those costs for resurrecting the damage caused to the car would be borne by the buyer. Some people prefer this kind of a contract because they would not have to make payments over a period of time and can afford to not worry about the payments till the lease period is over.
2. Hire purchase option: This option is pretty much similar to the lease purchase option but the only difference is that you have to make the payments on a monthly or a quarterly basis instead of making a lump sum payment. Moreover in the previous set up, the buyer has an option of buying the car once the lease period is over but it is not the case in hire purchase.
3. Personal Contract Purchase: This is a very popular option where the buyer buys the car and pays the dues towards the car on a monthly basis during the period. At the end of the period, the buyer can either return the car or pay the balance amount on the car to get full ownership of the car.