Buying a car with finance - Bank Loan

[Arran]

There are good things and bad things about both, generally it will be easier to get finance, as the company knows that the amount of credit is against something they can take from you in the event of non-payment. But they generally charge slightly more and if you want to sell the car you will need to agree with the seller that you'll pay off the remainder. Some people are put of looking at a car with outstanding finance. But then you could get a loan to pay it off should this be this arise.

When I was 21 I could get finance, but not a loan. The loan worked out cheaper, so I got it in my mom's name, but a sort of joint account. It has helped me doing it like this because when I changed my car, it just made the whole process easier not having to pay the finance off.

 

[Prestige Car Finance]

Car finance is generally slightly easier to get and looks better on a credit rating. You very rarely get the advertised rate on a personal loan. Ok personal loan maybe slightly cheaper but you have to remember the halfs rule. Once you have paid 50% of the total amount payable you can hand the car back even if the car is worth less so this in its own right could save you some money

 

[Matt17121991]

Does this 50% rules work on used financed cars? At a garage, not a renault dealership for exmaple.

 

[Prestige Car Finance]

Does this 50% rules work on used financed cars? At a garage, not a renault dealership for exmaple.

Aslong as it is a regulated finance agreement which it will be unless its a business agreement then yes, any car. It will state in your terms & conditions.

 

[Matt17121991]

Aslong as it is a regulated finance agreement which it will be unless its a business agreement then yes, any car. It will state in your terms & conditions.

Thanks alot for your help!

 

[shurm]

If its with a Garage make sure it's on Hire Purchase as some Garages use Barclaycard Finance and that is a Personal Loan agreement so no handback.

Using the Dealer keeps your line of credit open at the Bank as well in case you need money in the future, if you borrowed off them they would try to consolidate your existing loan into a new one, not always ideal.

 

[Fq_craigus]

I would never reccomend finance, a bank loan is the more sensible route, less stipulation for one but also car finance always front load the interest so you pay the interest back before the car..... Which is why ur settlement figure is always more than you expect it to be where as a bank loan each instalment is equal interest and borrowed amount. Also lower rates through your bank

 

[tiababy]

I got mine on finance. Paid off almost 2 years worth till I decided I'd had enough. Went to my bank and 30 minutes later came out with the settlement amount in a loan. Less money to pay each month for the outstanding period of time a interest is a lot lower then it was finance wise.

Look at both and do what's best for now. If you finance now and change your mind later you can always do the settlement figure and bank loan route.
Just make sure you go through the terms for either thoroughly.

Also my credit rating improved a lot having paid off the finance. Considering I has no rating to speak of pre car it made a lot of sense for me.

 

[Mentalpen]

I would never reccomend finance, a bank loan is the more sensible route, less stipulation for one but also car finance always front load the interest so you pay the interest back before the car..... Which is why ur settlement figure is always more than you expect it to be where as a bank loan each instalment is equal interest and borrowed amount. Also lower rates through your bank

I wasn't aware banks could beat 0% finance?

perhaps i should go and get a bank loan out to pay for the clio and 265 Trophy that i have on 0% with RFS.

 

[Fq_craigus]

I wasn't aware banks could beat 0% finance?

perhaps i should go and get a bank loan out to pay for the clio and 265 Trophy that i have on 0% with RFS.

Ok crack on with your 0% finance because a car dealership will be only too happy only making a small markup on their car and nothing on the finance and the finance company will only be too happy to just lend the money and make sweet fa on it. I used to work in a car dealership selling cars and 0% finance lines the salesmans pocket nicely

 

[Mentalpen]

I know what the cash price on both the Clio and the Trophy were and what it was with 0%.

For example I had to pay £600 more on the trophy with 0% over that of a cash deal. No way would a bank loan been any cheaper and before you say I probably didn't get a good deal on the trophy they gave it away. In fact a Clio raider at rrp in the same dealership was almost the same price.

On the 200 I found out the Speedlines were silver and had they given me black ones they would have made a loss on the car. I had to get CS to pay for the black ones.

 

[Fq_craigus]

Final balloon payment? Believe me when I say they catch you somewhere

 

[aemskelley]

I may have got this the wrong way round but...

I could approach the bank to pay for the finance part of a car deal - and still have the baloon payment at the end?

Or would I only approach a bank if I was doing a 'hire purchase' situation and would own the car at the end of the loan (with no balloon payment)

 

[Mentalpen]

Final balloon payment? Believe me when I say they catch you somewhere

Of course they catch you somewhere otherwise none makes any money and there is eventually no product to buy.

Ballon payment is only on pcp though.

You have to do your homework fully so as not to get raped.

As a car sales men you will know that you can off set a profit from one customer to the next or even gamble giving away front end margin and even more in an effort to gain rear end margin.

However that is a very, very risky tactic for any dealership to go for over a long term.

 

[Mentalpen]

I may have got this the wrong way round but...

I could approach the bank to pay for the finance part of a car deal - and still have the baloon payment at the end?

Or would I only approach a bank if I was doing a 'hire purchase' situation and would own the car at the end of the loan (with no balloon payment)

Ballon payment is aimed at people taking out pcp deal which is typically aimed at people with little or no deposit.

You then have lower payments and an end ballon payment you can either pay off, refinance or trade the car in.

HP you usually have higher payments as you are paying for all the car over the term of the loan period.

All the above is subject to deposits and cost of the vehicle of course.