Alongside the car finance plans you can arrange, simply taking out a loan could be an option. In many cases, with a loan you own the car you want straight away.
Most loans are given out by banks, building societies and independent finance providers. You choose how much to borrow and the length of the repayment term.
Buying a car using a loan is only possible if you have enough personal credit to take out the loan in the first place. Your credit history determines both your loan eligibility and the interest rates available. A poor credit rating could rule you out completely, or mean you only have access to high-interest loans.
There are two types of loan: secured and unsecured. A secured loan will mean that the balance is held against the vehicle itself – essentially, your finance provider owns the car until the loan is paid off. Unsecured loans avoid this issue, yet typically come with higher repayments and interest rates.
Using a personal loan to pay for your vehicle ensures that you become its official owner at once, meaning that you can sell it privately and modify it in any way you please. It also allows you a degree of choice regarding the length and size of your monthly repayments over the course of the agreement, as well as the interest rate on your loan.
Paying off a secured loan grants you full ownership of the vehicle. It is then yours to do with as you wish, whether you want to keep it, sell it on or part exchange for another model.
The final payment on your loan could come long after you have purchased the car. As the money for the vehicle is provided up front, with an unsecured loan you own it immediately.
It is possible, yet may incur extra charges. Each loan provider will have their own terms and conditions for early settlement. This is based on the amount you still owe, the interest rate and the remaining length of the agreement.
For more advice on ways to finance a vehicle, get in touch with any Johnsons Cars dealership. Our teams in the West Midlands, the south of England and Merseyside will be happy to help.