Buying a car is an enormous purchase and one that must be carefully considered. Many motorists find that purchasing a car outright is the ideal situation, but unfortunately, the price tag dictates that this is not a feasible option for many. Instead, you could consider financing the vehicle (paying in instalments over a pre-agreed period). This brings a few benefits and does not impact your financial situation in the same way.
The Key Benefit
The key benefit of financing the vehicle instead of purchasing outright is that you do not have to stump up a small fortune. Behind a house, a car is usually the second largest investment a person makes and it is a considerable amount of money. The majority will struggle to pull together the cash to buy outright, but financing allows you to pay in instalments.
How It Works
Instead of paying the price-tag and driving away with little in the bank, financing sees you pay a small deposit (usually 10%). The repayment scheme will be agreed with the car dealer, but typically they are flexible and made between 12 and 60 months (the longer the term the more interest you pay). If you have a good credit rating, you can get deals at lower interest rates and this makes it particularly appealing for those with good credit.
The loan is secured against the vehicle, but you will own the car once you have made the final payment. This is unlike Personal Contract Hire (PCH), where you are simply leasing the car for the agreed period.
Living within Your Means
Whilst you will incur finance charges with this method, it makes payment much more manageable and will not impact your daily life in the same way that it would if you paid cash. This is why many motorists now opt for this method when looking to buy a new car.
Financing a New Toyota
For those in the market, Toyota is an excellent manufacturer to go for and they have a number of highly-regarded vehicles, including the Yaris and Aygo. When you shop at Toyota dealerships like RRG, they can offer a range of finance options and savings across the new range.
Whilst many motorists would prefer to pay cash, this simply isn’t feasible for the majority. Fortunately, financing is a great alternative that doesn’t have such a heavy impact on your finances and still allows you to drive away with the car of your dreams.