Hire purchase (HP) to finance a new car
Hire purchase is a way of buying a car on finance, where the loan is secured against the car.
You’ll need to pay a deposit of around 10%, then make fixed monthly payments over an agreed time period.
This means you don’t own it until the last payment has been made.
Is it a good idea to finance a car?
Why Financing a Car is a Good Idea
There is really only one reason you would finance a vehicle instead of buying the vehicle outright. If you are disciplined and actually have the cash saved and have it invested in an interest-bearing account at a much higher rate than the financed amount.
Is it better to get a car loan from a bank or dealership?
The good news is that you have options: You can get your car loan from a bank or credit union, or you could go through the dealer. While both have their benefits and considerations, you’re always better off being informed about your financing options before you ask for the keys.
What is a car loan and how does it work?
Car Loan, Defined
More specifically, a lender loans the borrower (you) the cash it takes to purchase a vehicle. In return, the borrower agrees to pay back the lender the amount of the loan plus interest, usually in monthly payments, until the amount owed is fully paid off. Pretty simple, so far.
Photo in the article by “Pixabay”