What is Car Finance?

What is Car Finance?

Daunting, isn’t it? So many terms and phrases you’re not familiar with. Car finance can make you feel vulnerable when you need to stand your ground, but why let it frustrate you? We’re here to answer that all-important question, so you can buy your car on finance with no trouble and confusion whatsoever!

Car finance is often overcomplicated when actually it’s a simple and easy two-stage process whereby you decide on the most ideal finance agreement for you, like a loan, a lease or dealer finance for example. The second stage is the process of choosing the provider with the product that suits you best, in which case the agreement will then be confirmed and agreed to by both parties.

Although it might seem otherwise, car finance makes the process of buying a new car much easier and relatively less stressful for many people – this just depends on what type of car finance you find will be more beneficial for you. With car finance, you can research into which type has more benefits for yourself, rather than downfalls. The best part is that you don’t have to just agree to the finance agreement the dealer offers you when you go to buy a car from them, build your knowledge up and tell them what’s best for you!

Smile Car Finance offers a simple and easy method for applying for car finance, their online form takes just 60-seconds to complete. Their deals are tailored to you, enabling you to get the car you want with affordable monthly payments.

Of course, while there are numerous different types of a car finance, it’s easy to get confused when you go to buy a car. But actually, when the terms are explained well on paper, you’ll find that they’re much easier to understand. A few examples of finance agreements include:

  • Personal Contract Purchase – Once a personal contract purchase agreement ends, you have three options to either; return the car to the supplier, keep ownership of the car or trade the car in for a replacement. Only choose a personal contract purchase if you want to make lower monthly payments, the options available at the end of the agreement are the best for you, or if you can confidently estimate your mileage accurately.
  • Hire Purchase – If fixed monthly repayments suit your budget and your circumstances and you have no issues in terms of only owning the car once the debt is completely repaid, then you might want to choose a hire purchase agreement.

There are plenty of other finance options available for you when buying a car, these include both self-financed and dealer finance – the two most common options. Don’t stress yourself if you’re still unfamiliar with what car finance really is, plenty of dealers will do their best to explain each term to you before you agree that the deal is the best one for you.

Mia Frazier