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Choosing the most suitable car finance option.

Several factors determine which of the car finance options might be the most suitable for you. One way of buying a brand new vehicle from the showroom is by taking the hire purchase option that is offered by the dealer.

Several factors determine which of the car finance options might be the most suitable for you. One way of buying a brand new vehicle from the showroom is by taking the hire purchase option that is offered by the dealer. However, there are other options depending on whether you are buying new or second hand. And by doing a little research and researching all your options, you could potentially find yourself a more suitable deal that saves you money.

Looking for the best deal

You may have decided that you wish to take out a loan to buy your vehicle rather than go with the hire purchase deal in the showroom. This might work out to your advantage in many ways. The first of these is that you are able to search around and compare the rates of interest. You are able to phone around lenders or you are able to take the easy option and look online with a specialist car finance website to compare. Even better, you might choose to search for your vehicle online with a specialist website offering a car search and finance option. If you take this option, you do not even have to search around used car lots or scour the newspapers. You may be able to find your dream vehicle at a bargain price as well as get a great deal on the car finance - all on the one website.

One of the most important factors to look for when taking out finance is the interest rate. When comparing loans some lenders may state what seems to be a low rate of interest, but this is only the typical rate of interest based on an average person’s circumstances. This rate may vary depending on your own individual circumstances. Therefore, always ensure that you are comparing interest rates on a like-for-like basis.

Before you go looking for your vehicle and car finance, always set a figure in your mind and do not go over this amount. It may be very tempting to be talked into purchasing a vehicle costing hundreds of pounds more than you intended to spend. Remember, if you are taking out finance also that interest is added onto the amount you borrow. Once you have sat down and worked out how much you pay in total this might be way over what you are able to afford.

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Back to January 2010

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