How should I fund my next used car?

If you are searching for your next used car, you may be wondering about funding it. Now more than ever, there are so many different options and routes to buy, which means cars are more accessible, but it can also be confusing. Here is a comparison of the most common ways to buy a used car, so you can work out which route will be best for you. 

Here is a rundown for you of cash payments, bank loans and PCP car finance…

Cash purchase 

Buying with cash or buying outright is still very much an option. There are many reasons why you might want to buy a car outright, such as not wanting to have to worry about paying for it every month, and owning the car from the offset. There are plenty of advantages to buying outright and you may be able to work out and negotiate a better deal in some places, but even if this is not possible, you will be saving money through interest and APR, so even if the price on the screen is the best deal, you will still be getting more for your money than if you opted for finance or a loan. Buying with cash or outright is still a very popular way to buy a used car.

Bank loan 

Another option is to go for a bank loan. There are advantages of getting a bank loan such as benefiting from a lower interest rate at times, and some people like to keep all of their finances in one place and under one roof, which is understandable for some. A bank loan means you own the car outright, as you take out the loan in order to pay for the car, so this can be a popular option to buy a new used car. 

PCP 

PCP stands for personal contract purchase and it is a type of finance whereby you typically pay a deposit and then the balance of the agreement is split over a number of months. It will all be written out into the agreement and there are usually a few options at the end too, such as buying the car outright, handing it back to the finance company or using it against your next finance agreement. There are plenty of benefits to finance, especially PCP, as you can build the deal to suit your budget and lifestyle, with how much you put down as a deposit and how long you spread the cost over. It is worth looking into what your deal could look like and finding out about things like low rate car insurance and prop credit car finance too, as there are plenty of options out there. 

There are plenty of different ways to fund your car so if you would like to chat further and find out more about any of the options, and find your dream car in the process, come and get in touch with us at Hilton Garage, the used car supermarket in Derby, and the team will be more than happy to help you.