From city cars and hatchbacks to estates and SUVs, there are plenty of used vehicles out there to choose from, and buyers really can get exactly what they want. But what about the cost? In this post we’re going to look at ways of paying for the second-hand car that you desire.
Paying the Entire Amount in Cash
This is perhaps the simplest route, involving almost no financial complications. The only thing it does require, however, is that you have enough money in the bank (or tucked under your mattress) to pay for the car that you want. One of the great things about used cars is that you can choose one that is more affordable – and therefore possible to be paid for with your savings. But what about options that cost a little more? Or what if you don’t want to spend your savings all at once? This is where finance comes in.
Using a Trusted Broker
If you’re looking to secure finance for a used car, then perhaps the best option is to choose a broker which can compare deals for you, and you can find a trusted example of this on the AA Cars website. Their car finance calculator will give you a quick, personalised quote showing you how much second-hand car finance could cost you every month, along with representative APR and information about the total amount you will pay. You will also be able to get almost instant approval, putting that used car within reach.
You can easily find an online car broker to eliminate the hassle of buying a new car. Talking to an online car sourcing expert is convenient, especially if you’re unsure what vehicle you want and how much money you should be paying. Aside from negotiating the best payment option that’s flexible for you, an online car broker can organize the delivery of your new or used car purchase, as well as a test drive car to you.
Going Direct to a Bank
Another way to secure finance is to approach a bank or money lending institution directly. This way you might be able to negotiate your deal or argue for better terms – although these are usually fixed. If you already have an existing account with the bank and it’s in good standing, try to speak with the manager to grant your request.
Types of Finance
If you are going to use finance – as opposed to paying the full amount in cash – there are two common choices:
- PCP (Personal Contract Purchase), which requires an initial deposit and splits the cost over monthly payments, usually allowing for an optional final ‘balloon’ payment which will allow you to keep the car.
- HP (Hire Purchase), which also divides the cost into a deposit and a series of monthly payments, with the car becoming your outright property after the final payment.
The price you pay for these will depend on the type of car, the size of your deposit and the number of payments required by the contract. Either way, if you qualify for this type of finance you will be able to drive off in the used car you are looking for.
Takeaway
How do you want to pay for your used car? Whether you want to purchase a second-hand car using your savings or availing of finance options, make sure to choose a payment method that is more convenient and suitable for you.
You don’t want to risk using all your savings to buy a used car and leave risking your emergency fund. On the other hand, you also want to make sure that the financing option you’ll choose won’t keep you in debt for a longer time than expected due to high interest and inability to pay. So, set your goals first and start from there.
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