If you are looking to find car finance in Cheshire, Car Finance 4 U has several options to help you get the right type of credit for your needs.
About car finance
Car finance is used to make the cost of buying a car more affordable. Contractual agreements are put in place to spread the cost across monthly repayments. There are several different forms of agreements, such as a hire purchase contract or a personal contract purchase. Car finance is a popular way of financing a car, it is estimated that approximately eight in ten cars are purchased through some form of loan or credit, so if you need finance to afford a car, you are not alone.
How does car finance work?
Each type of car finance has different terms and conditions. However, in most cases, car finance means that a finance company will buy the car on your behalf and you will pay them back the value of the car itself plus any interest that they charge you. Usually, agreements are secured against the vehicle for a contractual period, which is generally between 3 to 4 years. Over the course of the contract, you won’t own the car; the finance company who issued you credit will. At the end of the agreement, once you have made all the repayments, you will then become the owner of the car, unless you have taken out a rental agreement (in which case it would be returned to the finance company).
It is helpful when considering Cheshire car finance to remember that whilst taking out a longer term loan will bring down the cost of monthly repayments, you will end up paying more interest overall.
Who is eligible to get car finance?
Often, people who have a bad credit history or don’t have any credit history at all will be refused. People with a low income, such as those on benefits or people, who have an ‘unstable income’ such as the self employed, may also be refused. That is not the case with us. We will consider every application, even from people who have poor or bad credit history. If successful, we will come up with a tailored plan that is beneficial to both parties.
Car Finance4 U finance packages
Hire purchase agreements are widely considered to be the simplest way of financing a car. With this type of agreement, you will pay a deposit at the start and then you will pay a fixed payment every month. Until the final payment, the car will be owned by the finance company. When the agreement is due to terminate, you will have the option to pay a fee to transfer ownership, in which case the car becomes your own. Until this point, you have no rights to sell the vehicle.
Would you be suitable for a hire purchase agreement? You should consider it if:
- Eventually owning the car would be important to you.
- You have a budget which would suit fixed monthly repayments.
- Your level of disposable income could decrease in the near future (for example if you are planning a family)
- You don’t mind not owning the car until you have fully repaid the debt.
Personal Contract Purchase Agreements
Like hire purchase agreements, personal contract purchases begin with a deposit that you have to pay at the beginning of your agreement. This is then followed by fixed monthly repayments. However, they differ in the fact that at the end of your agreement, you will have options as to what to do next. You will have the choice of returning the car, keeping it or trading it in for a newer model. If you choose to return the car, this will not cost you anything, but if you wish to keep it you will have to pay a final payment. The final payment is known officially as the guaranteed future value. The amount that you will pay will be agreed at the start of your contract and it depends on a number of factors such as how long the loan period is and how much mileage you expect to cover.
Would a personal contract purchase agreement be right for you? Consider it if:
- The idea of lower monthly repayments appeals to you.
- You consider it important to have options once your agreement comes to an end.
- You believe you can confidently estimate how much mileage you would cover.
Car finance terms explained
APR (Annual percentage rate) this is to give you an idea of the cost of your loan. For example 10% APR on a loan of £10,000 would mean that you pay back £11,000.
Excess mileage- If you buy a car on a personal contract purchase agreement, you will only be able to cover a certain amount of miles as this will assist in predicting the future value of the car. This is particularly important as some agreements mean that if you go over your mileage (excess mileage) you could be paying per mile.
Guaranteed minimum future value- When you choose a personal contract purchase agreement, your dealer will provide you with a valuation of what the car will be worth at the end of your agreement. After your final payment, this valuation becomes the amount that you pay if you choose to keep the car. It is calculated based on things like the terms of the loan and how much mileage you will do.
Car Finance 4u, car finance for Cheshire has a range of options that will suit all needs and budgets.
About Car Finance 4u
Car Finance 4 U is a licensed car finance broker based in Warrington and across Cheshire. It specialises in matching customers with responsible lenders and making the process of getting car finance simpler by providing both the car and the finance.
If you wish to calculate how much car finance you could get, please use the finance calculator on this site or contact Cheshire’s best car finance provider, Car Finance 4 U.