There are numerous options you could consider when buying your new car to help streamline the purchase. One such example that is increasingly popular among younger drivers is the world of car finance – which can no doubt provide many benefits. But how can younger drivers benefit from finance, and might this be the right option for your vehicle purchase?
How Does Car Financing Work?
Car financing is a relatively simple process, much like many other forms of financing agreements. The buyer generally puts down a sum of money toward the purchase of a car; a financing company provides the remainder of the value as a loan. From there, the borrowed sum is paid back in monthly instalments until the vehicle is owned outright.
Usually, car financing will charge interest on the loan. This does mean you’ll pay slightly more for the vehicle than you normally would.
Can I Buy or Sell A Car That Was On Finance?
If you are buying a car on finance, there’s some good news: you are perfectly welcome to sell it once the loan has been paid off. However, until you have paid off the loan, you do not own the vehicle outright; thus, you will not be able to sell it until the finance agreement has been settled.
Along a similar line of thought, you should never purchase a vehicle with outstanding finance (no matter how much of a bargain it might seem). This could leave you taking on someone else’s finance – effectively making you pay for the car twice.
Luckily, a vehicle check offers the ideal option in this regard, allowing you to check that your chosen new car is genuine. Vehicle history checks help you ensure that the seller has paid off any financing they may have had on the vehicle; moreover, they also provide a wealth of other information, such as write off status, MOT history, and more.
The Benefits of Car Finance for Younger Drivers
Car finance can be a good option for younger drivers for numerous reasons, and keeping this in mind can help you decide whether this might be the right route for you to go down.
Most notably, car finance allows younger drivers to purchase a vehicle that might otherwise require them to save up for longer – offering a whole wealth of new opportunities accordingly.
It’s also important to note here that car finance for younger drivers can help you develop your credit score – potentially making it easier to take out more substantial loans (e.g., a mortgage) down the line.
And, if you have been concerned about getting approved, there’s some good news: car finance is available even if you’ve only got a provisional licence, so don’t overlook it just because you’ve not yet passed your test.
Cars are expensive purchases (even when buying second hand). As such, getting finance can be an excellent option for younger drivers – but always make sure that the vehicle you are purchasing is genuine and not on finance first!