The car finance is a widely available facility that is offered by almost every dealer or broker. It is a great help for the buyers as well as for the sellers also. The varieties of finance plans have been introduced to facilitate the diverse buyers’ segments. The buyers are primarily concerned for the financial help, safety cover, and the cost while the sellers are also concerned to ensure their profit. The car financing with accidental cover comes at lower cost because it makes the given finance safe for the credit company. When you think about car financing in the UK, the numbers of options come your way but car loans in UK from direct lending stores are preferred the most.
The Flexible UK Market for Car Financing:
Very few of us can buy the car by paying in full at once; therefore, getting car loan has become must and widely accepted practice. During a recent survey at the start of 2018, nearly 50% people admitted they don’t know the exact borrowed amount for car buying; almost 90% of car owners admitted that they don’t understand everything of finance agreement. Almost 30% car owners don’t know that the multiple applications for car loan hurt their credit score. Still, the car financing market in the UK is flourishing at high pace. Because of increasing dependency upon the loan for car buying, the UK car market offers different financial solutions to buy a car without worrying about the repayment:
- Hire purchase (HP) finance: It is secured against the purchased car; owner doesn’t own the car until the final payment is made.
- Personal contract purchase (PCP): It is like the long-term rental allowing the owner to use the car for the contract period. After the contract period, the owner can by the car or return the car.
- Contract Hire or Personal leasing: It is like PCP model but the user can’t buy the car at the end of contract period.
Accidental Cover Makes the Car Finance Deal cheaper:
Wait passage of time, UK car loan market has changed a lot. Previously, the car finance used to be simple a matter of paying some deposit and then paying conveniently adjusted monthly installments until the credited amount was paid in complete.
Today, majority of car loans are on PCP model. Total UK consumer debt is about £198 billion, out of which, 30% is for car buying. The total car loan amounts to £58 billion, out which £34 billion is made by non-banking institutions i.e. direct lenders.
Every financial help costs little or more; car finance also does the same because the lender is concerned for repayment of credited money. If the car is insured, the credited money is also safe; therefore, lenders offer cheaper deal for fully insured cars. Although you pay more premium for Comprehensive insurance comparative to third party or third party fire and theft insurance but the reduced interest rate and easy terms and conditions subsidize the additional cost plus you get peace of mind even for the worst happening. By having comprehensive insurance, you are free from loan repaying liability in case of accident.
Getting the car insured is must to enjoy the drives and you need the best deal to pay less for the maximum risk cover. The insurance covers all the risk factors including the paying liability for car loans in UK in case of car stolen or car accident. The numbers of online comparison tools may help you get the best car insurance proposal for the financed car.