Car Loans

Car Finance     On Line Application

                      A Personal loan for your car purchase

For the consumer customer there are six ways to buy a car on credit. Hire Purchase, Lease Purchase, Contract Purchase, Unsecured Personal Loan, Secured Personal Loan and Credit Cards.

Hire Purchase
A straightforward payment plan secured on the vehicle (and if you borrow under £25000 regulated under the consumer credit act giving you added security), where at the end of the agreement you own the vehicle. Repayments can be between one and five years, generally the five-year finance is for new vehicles with any agreement you will have to pay a deposit.

Lease Purchase
A term used for commercial customers but can be used for the consumer customer as well. The only difference is the way you structure the deposit. With Hire Purchase you generally pay a % deposit or you have a part exchange with lease purchase you pay so many payments up front. I.e. Your monthly payment is £200 your agreement is a 3+33 therefore you pay £600 up front.

Contract Purchase (Generally only available on new cars.)
All the benefit of Hire/Lease Purchase but will lower monthly payments, why? Because you have a guaranteed residual value built into the agreement at the end. So at the end of the agreement you can decide whether to keep the car and pay off the balance, sell it and settle the outstanding balance (whilst retaining any profit), or simply return it subject to the return conditions, e.g. excess mileage charge, excessive wear and tear, minimum tyre depth, bodywork being in good order etc. Remember the finance company is out to make money not lose it, so don't expect to just walk away if you have left the vehicle like a shed, but in recent years where residual values have significantly reduced in the second hand market this can be a very good way to fund a new vehicle and remove any disposal worries on your part.

When buying a car on either Hire Purchase, Lease Purchase or Contract Purchase remember you don't own the car until you have made the final payment, but when you buy a car with help of this type of agreement firstly, it must be purchased from a company with a Consumer Credit License and therefore regulated by the office of fair trading and second before the vehicle is paid for by the finance company who will HPI the vehicle to make sure there is no finance outstanding on it, or it is not an accident repair and the mileage is approximately correct (if recorded). An excellent benefit of the vehicle being owned by a finance company rather than yourself is if the garage calls in the receivers and you have problems with the car you can call the finance company and ask them to sort it out. A good example here is Daewoo and if the car manufacturer had not been sold it would have been up to the finance companies involved to sort out any warranty claims on the cars.