Vehicle Loans

Vehicle finance refers to the various financial products available to help individuals purchase a vehicle. Instead of paying the full price upfront, you can borrow money from a lender and repay it over time, typically with interest. This approach makes vehicle ownership more accessible by spreading the cost over a period that suits your budget.

Types of Vehicle Finance

Several options are available when it comes to financing a vehicle, each with its own set of terms and conditions:

• Personal Loans (unsecured): You can take out a personal loan from a bank, credit union, or online lender. The loan is not secured against the vehicle, which means the car won’t be repossessed if you fail to make payments. However, the interest rates might be higher compared to other options.
• Hire Purchase (HP): With HP, you pay an initial deposit followed by monthly payments. The vehicle becomes yours once the final payment is made. The loan is secured against the car, which serves as collateral.
• Personal Loans (Secured): Similar to the unsecured loan, this you taking out a personal loan through a lender and making monthly payments. However, the difference here is the vehicle is secured against the loan as collateral in the event that you fail to make payments. It’s a more secure loan for the lender so they’ll reward you with a lower interest rate, but if you fail to make payments, they can repossess the vehicle.
• Lease Agreements: Leasing a vehicle is like renting it for a longer term. You make monthly payments to use the car but never own it. At the end of the lease, you return the vehicle to the dealership.

Qualifying for Vehicle Finance

To qualify for vehicle finance, you will typically need to:

• Have a Decent Credit Score: This can help you secure a loan with favourable interest rates that beat the often high dealer finance options.
• Provide Proof of Income: Lenders will want to see evidence that you can afford the monthly payments.
• Provide Identification and Proof of Residence: Necessary for the credit check and loan application process.

Vehicle finance can make the process of buying a car more manageable by allowing you to spread the cost over time. Each option has its own benefits and considerations, and the right choice depends on your personal circumstances and financial goals.

Before you make the exciting purchase, get in touch with us to ensure your rates are as favourable!