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Sep 24

Considering Different Types Of Motor Vehicle Finance

Zooming around town or to and from work or school in a new or used vehicle at any rate, in something far more agile and enjoyable than your last mode of transportation– is a joyous experience that can provide a great deal of convenience and even entertainment for busy motorists. But choosing an unwise or inappropriate financing option for a new or used vehicle can seriously detract from the enjoyment of the drive. The world of finance, particularly when it comes to automobiles, can be confusing, and some car buyers work with the first option they’re offered in an attempt to bypass the frustration and fine-print. But taking the time to understand the different types of motor vehicle finance available, including the situations in which they work best and the time commitments involved, can lead to an experience that’s hassle and worry free both now and in the future. Individuals are likely to primarily encounter two basic financing options, either through a broker or directly from the party selling the vehicle. A consumer car loan is a very popular choice and is widely used when the individual is using the vehicle for personal purposes. A consumer car loan considers the vehicle itself as the security for the loan. This type of loan comes with a number of terms including the basic interest rate, establishment fees, monthly fees and discharge costs. It’s important to ensure that all fees are disclosed prior to signing an agreement for a consumer car loan. It is imperative that you feel comfortable and understand what you are signing up to.

A basic personal loan affords more freedom due to its general opportunities for use and for this reason some applicants take up this option when purchasing an imported vehicle or a vehicle that does not qualify as adequate security, for example, a vehicle older than 10 years. Businesses can take advantage of a number of finance options for motor vehicles. Some of the most commonly available financing types include Chattel Mortgage, Commercial Hire Purchase, Novated leases and your standard Car Lease.

Depending on the specific financial and strategic needs of a business the best set-up for the business or employee using the vehicle for business purposes will be met, a business car financing plan should be developed to ensure that assets aren’t left depreciating, and that purchasing power, where desired, is amply afforded. Another option for many businesses is a car rental agreement, which allows for equipment upgrade but places no responsibility for the residual value of the vehicle in the business’ hands. The right motor vehicle finance option for an individual or a company is one which complements individual needs and preferences, and which makes sense for both the short and the long term. Either through a broker or on one’s own, determining which car financing plan is best for you is a sure way to realize smooth driving down the line.

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