Cars are wonderful things. They provide freedom, accessibility and agency to those who own them, and to passengers they can be boons when it comes to getting to hard-to-reach places or skipping a circuitous public transport route. Put simply, if you’re able to drive, then you should be putting that skill to use with your own car. If you can’t drive, there’s never been a better time to learn, with plenty of eco-friendly options available if that’s a stumbling block for you.
Of course, you might not be buying your first car. Perhaps you’re reading this and wondering how you could finance a second car; either a vehicle on top of your first one, or a car which a family member can drive. If you don’t have the funds immediately available to finance a second car, don’t worry; there are plenty of ways you can go about this without breaking the bank. We’ve put together a list of ways you can finance a car, be it your first or your second, in 2019.
Dig into your savings
You might think we’re starting off obvious, but you’d be surprised how many people neglect to think about their savings when they’re financing a big new investment. If you’ve got a savings account that you’ve been paying into for some time, then this is an excellent option for financing your car, especially if it’s your first vehicle. Even if you’re simply withdrawing for a deposit on a car which you’ll then make monthly payments for, your savings is a great place to start.
Take out a logbook loan
This is an option more for those who are financing a second car. A logbook loan is an amount of money which is lent to you and secured against your vehicle. Think of it as the vehicular equivalent of a mortgage; where a mortgage is secured against your home, a logbook loan is secured against your vehicle. It’s not a scary or difficult process to apply for one, and depending on the lender, it can net you a significant amount of cash towards that second vehicle. Find yourself a good logbook loans website and start browsing now.
Look into credit union car loans
If you’re lucky enough to belong to a credit union, then there’s a very good chance that your credit union will offer extremely competitive rates on a car loan for you. Effectively, a credit union is a collection of people who work together or live in a certain area, and members pool their finances together to create a common resource for other members to borrow from. Credit unions have been expanding significantly into the car lending market recently, so if you’re part of one, it’s time to find out whether you’re eligible.
Personal contract hire
If you’re looking to minimise your spending week in week out, then your best option might be personal contract hire. With personal contract hire, you don’t actually own the vehicle outright and you never will; instead, you “lease” the car from its owners by signing a lease agreement. This is an ideal option for those who are going to change their vehicle regularly, because the lease agreement is fairly short-term (usually between 1 and 5 years) and a replacement can be leased at the end of the agreement. If you’re more in the market for ownership, but you’re still after a lower monthly rate, then perhaps you should consider…
Personal contract purchase
Personal contract purchase is very similar to PCH (personal contract hire), but with the option of buying the vehicle at the end of the contract term. Just like PCH, you’ll need to front around three months’ worth of the lease agreement upfront – think of this like a deposit – but unlike PCH, you can opt to buy the car at the end of the agreement. You’ll likely spend a little more on personal contract purchase than you would on PCH, but it’s still probably less than a standard car loan and means that you won’t have to worry about resale value at the end of your term (if you don’t opt to buy the vehicle, that is).
We hope this guide has been useful in helping you to decide how to finance your next car. There are plenty of options available to you, so start making enquiries today and you’ll be amazed just how flexible many lenders can be.