If you want to buy a car there are a lot of ways to finance the purchase today. In any case it is very important for you to make a right choice because otherwise you can pay much more than it has been planned.
We offer you the description of the most popular car financing schemes to show their positive and negative features.

1. Personal Contract Plans
According to this finance scheme upfront you pay a deposit and then you make smaller subsequent payments every month. In two or three years you will have 3 alternatives. You can make a large final payment (so called “balloon” payment) and keep your vehicle. Another option is to return the car and go away. However for this your car must be in proper condition so the dealer may put limits onto your mileage. The third variant can be used when the car’ s value remains higher than the “balloon” payment. in this case the difference can be used as the deposit to buy the next car.
The main advantage of this scheme is low monthly payments which allow you drive a car much more expensive than you can really afford. Besides it provides a very simple way to change the car every three of four years and get a new one. However choosing this finance scheme make sure that in a few years you will have enough money to pay the final “balloon” payment.

2. Hire Purchase
This finance scheme is arranged through the dealership. The main advantage of the scheme is that once you have accomplished the agreement term you become the owner of the car. Besides the rates are usually very low as dealers try to maintain their business. That’s why if the rate seems to you rather high you’d better try to find another dealership company and save your money. In the event you are not able to cope with your monthly payments the car will be repossessed.

3. Personal Loan
A lot of people think that if they pay cash for a new car it will be the cheapest possible deal. However it is not always wise to concentrate on one option. Let car dealers give you a quote and then make your own research in order to find a better variant. Personal loan scheme has one advantage is that it is not secured on the car so it will not be repossessed in the event you can’t make monthly payments. Besides the total amount of interests you have to pay is lower than at other options. In any case at first it is better to get to know what the dealer is ready to offer you. .

4. Extending Your Mortgage
This option allows you to spread the car cost for a very long period of time, for example for 20 years. It is suitable for those whose financial situation leaves much to be desired. At the same time you should realize that at this scheme your overall repayments will be rather high due to a long run. Besides it is rather complicated to arrange buying the car in such a way as it needs more time.  In the event you fail to pay monthly payments the consequences may be very dangerous as you can even lose your home.

Bill Murray