Different Kinds Of New Car Finances

Different Kinds Of New Car Finances

Car Finance is the cumulation of different financial products which helps someone to buy a car in installments or with a lump sum payment.  New Car finances help the buyer of the car to raise funds in time to get good deals on the car offered by the dealer.

 Types Of Car Finance

New Car FinanceThere are different types of car finance:

  • Commercial Hire purchase: In this type of car finance, the financier buys the car and hires it out to the customer who originally wanted to buy it and takes monthly payments and then the car is handed over to the customer once the whole amount is paid. The best part of this form of car finance is its flexibility in financing. Here the interest rates and the repayments are fixed.
  • Standard Loan: It is the simplest of car finances. Here the financier helps the buyer to get the car by lending him money. Only the buyer has to be financially sound. The loan can be secured or unsecured. The unsecured loan has a higher interest rate. The car for which the loan is taken needs to be fully insured here. This type of finance includes on-road costs. The fixed rate is low here and there are flexible terms of time and repayment.
  • Finance lease: In this type of car finance, the financier buys the car and then leases it to the buyer. It helps in the immediate use of the car with little capital investment. The financial leases are available for individuals and businesses. The buyer pays fixed rentals every month and takes responsibility for the maintenance of the car. When the lease period is over, the buyer has to decide whether to buy, sell, return or refinance the car. The repayments are generally tax deductible. The lease payments are made with pre-tax dollars. The interest rate is low as the loan is secured against the car.
  • Novated Lease: This finance is an arrangement in which the employee’s salary in an organization is reduced for an equal value of the car benefit. The financier directly leases the car to the employee. It is the obligation of the employer to pay the financier via a Novated deed on the employee’s salary. All operating costs, including registration, servicing, insurance, etc. are the responsibility of the employee who is the motorist. He only has the responsibility of the car on the termination of his service. Here the motorist can buy the car at the end of the lease. Here the car can be leased for 100 percent private use.
  • Operating lease: In this type of car finance, the financier buys the vehicle and rents it to the buyer. The financier has the ownership of the car. The buyer has no risks attached to ownership. At the end of the term of the lease, the motorist can buy the car, keep renting it or change to another car.

So to get the best deal on new car finances, you can visit the One80 Financial Services.

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