A traditional method of buying your new car is Hire Purchase. A Hire Purchase agreement is one of the most flexible and cost-effective ways to manage your finances when budgeting for a new car or van. It's very similar to a personal loan, as you'll make monthly payments over a time period of between 12 to 60 months with a set level of interest. Once you have made all your payments you own the car.
It's easy to adjust the deposit amount and the length of the agreement to suit your needs – you may even find a zero deposit deal available. Typically a term lasts between 12 and 36 months, with an instalment due at the same time every month. The payment amount and your interest rate will both be fixed, so there are no nasty surprises in store.
The vehicle that you choose becomes the security for your finance agreement, and you can start using it straight away while you're making payments. This helpfully keeps other forms of credit open to you should you need them in future. It does also mean that, if you fall behind on payments, the car will be repossessed; and you may still be liable for the outstanding balance. You are not allowed to sell the vehicle or get rid of it while your agreement term is still running.
If you find you're able to pay off your Hire Purchase earlier than planned, you can do so with no penalties or extra charges. Once you're paid up; at the end of your agreement or earlier you take full ownership of the vehicle. It's then yours to do what you like with, whether you choose to keep it a little longer or sell it on yourself.
As car loan lenders are tightly regulated you gain many advantages such as receiving a reduction on interest in the event of settling early. Personal loans often incur penalties for early settlement.
To find out more about your Hire Purchase options and choose a new model, please contact our friendly and helpful staff at Wilsons today.To start an application for hire purchase simply call us and request a quote or complete the below enquiry form and we'll get in touch.