One of the most common reasons people borrow money and get into debt is because of their car. Whether it is buying a new car or repairing a current vehicle that has broken down, cars are often a drain on financial resources. It is easy to end up in debt with a car and feel like you are unable to make the payments to keep it.
The problem is that for many people a car is a necessity for everyday life. If a car that you own gets to the point where it is more expensive to fix than the value it is worth, then buying a new car is the only sensible option. If you are already in debt you may have problems being accepted for credit and this can become a real concern if you need a vehicle.
Car finance has been designed to be a flexible product that is suitable for a wide range of people. It can offer rates that are comparable to personal loans if you have a good credit rating. If you have been in financial difficulty car finance may be one of your only options for finance. If you have a poor credit rating the rates offered are likely to be higher than those offered with a personal loan, but the loan will be more obtainable. The reason for this is because car finance actually uses a product called Hire Purchase and this type of loan is secured against the car.
The fact that the loan is secured against the car can be a cause for concern for some. Many people believe that if they are so much as a day late of a payment they run the risk of the car being taken away from them. In reality this is highly unlikely and the lenders that offer Hire Purchase loans will work with their customers to make the product as flexible as possible.
The other major benefit of having a Hire Purchase loan is that it leaves the option of being able to have a personal loan running along side it. This means if you are looking to consolidate a number of debts into one payment, you will be able to borrow the amount you need along side the car loan. Often people will struggle to have two personal loans running side by side.
Car finance is an excellent product that offers flexibility for anyone who finds themselves in the position where they need or want to buy a new car.