Press Release Summary = Most UK motorists are eager to be among the first to drive away a new 2007 registered car. A leading finance provider in the UK market is of the opinion that personal loans are a better way of funding a car purchase.
Press Release Body = London - March 17, 2007: According to a leading finance provider, around 400,000 car purchase transactions are likely to take place by the end of March 2007. Their advice is to explore the market, as most car buyers are too quick to take up the first credit agreement that they are offered on the forecourt - commonly offered by car dealers.
In their newsletter, they have explained the forecourt finance options - hire purchase (HP) and personal contract purchase (PCP) - in detail and are of the view that PCP monthly payments are usually lower than traditional HP.
According to them, the traditional hire purchase (HP) is the most convenient way to buy a car, where the loan is secured against the car itself. But, the car is not owned until the final payment has been made, which means that there could be severe implications if payments are not met.
In the second option, the borrower makes periodic instalments till the end of the term and then has the option to either pay a \"balloon payment\" (the guaranteed final value of the car based on its predicted depreciation), swap the car for another or simply give it back.
According to them, there is a third option that is often overlooked by car buyers - personal loans. Unlike most forecourt finance options, these loans offer significant savings, as they are still available under 8% APR and attract no additional fees.
To confirm their point, they cited an example, which shows that a typical APR range of some of the most competitive deals is between 6.3% and 7.9%.
On the other hand, the average APRs offered on the forecourt are in double digits and attract both arrangement and purchase option fees.
Highlighting the drawbacks of forecourt finance, the management is of the view that those who choose the personal loan route may find themselves in a better position.
Source of news: http://news.google.co.uk/ Original link - http://www.moneyextra.com/news/news-choose-right-027869.html
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