When given the opportunity to purchase a car that you really want, you’d really grab that opportunity in whatever way possible. After all, it’s not that easy to buy your dream car, right? You have to be financially prepared in order to finance your car without having to worry about delayed payments. Explore each kind of loan and decide which suits your budget and payment options.
1. Standard Loan
The simplest way is to borrow money from a financier. It can be a bank or a credit union. Yes, it may be the simplest form of a loan, but you have to be financially prepared in order to secure your car entirely. Once you borrow money from a bank, it may ask you to pay than the original amount (interest rate). The good thing about it is that you can choose to pay the total amount in a more extended period of time. This means you have to be consistent in paying the amount every month. Some can even give you more flexible terms for time and payment.
2. Commercial Hire Purchase
The financier will purchase the car and hire it to the client or consumer for a period of time. There are also options for monthly payments that pay out the entire loan. The vehicle is then transferred to the consumer when all payments are complete. The upside of this is that repayments and interest rates are fixed. It can also be easily adapted to suit the borrower’s budget.
3. Finance Lease
The financier owns the car and leases it to the motorist. It offers the use of the vehicle immediately without capital outlay. It can also be available for personal or business purposes. Monthly rentals are also the way for payment, and they will be the one to shoulder maintenance as well. At the end of the term, the motorist will be given the option to return, sell, buy, or refinance the car. This is great for people who are looking for a payment option with a lower interest rate.
4. Novated Lease
This is an arrangement wherein the financier deducts the monthly payment from the motorist’s salary in exchange for vehicle benefits. The employee leases the car from the financier directly. The motorist covers all maintenance costs of the vehicle. He also has the sole responsibility at the end of the payment period. Because of this, the motorist can choose the preferred vehicle to be leased.