Is your car looking a bit worse for wear but you can’t decide between opting for car finance in Manchester or purchasing outright? Take a look at the pros and cons of each – from cost to mileage restrictions – and discover which option is right for you.
Is your car looking a bit worse for wear but you can’t decide between opting for car finance in Manchester or purchasing outright?
Take a look at the pros and cons of each – from cost to mileage restrictions – and discover which option is right for you.
Commitment
Paying for a car in one means you’re not tied down to any contracts or hidden interest charges. The only ongoing costs you have to think about are insurance and general car maintenance.
If you opt for car finance in Manchester, you will be committing to regular payments that you’ll be expected to pay each month on time and in full – otherwise, you could be at risk of repossession.
Upfront Cost
Paying in full means the total cost of the car must be paid at the time of purchase. It’s a pretty big cost that can leave many people with less financial flexibility for other expenses or investments.
Buying a car on finance will keep your cash reserves intact for emergencies or other investments. Depending on the company, you may not be required to provide an upfront cost at all, but if you do, it won’t be anywhere near the total cost of a car.
And, with many car finance companies offering 0% APR, paying in full might not save you as much money as you initially thought.
Restrictions
Some finance plans include strict restrictions on what you can do to the car and how you can drive it. Many companies set mileage limits on a monthly or yearly period, with penalty charges if you go over.
You will also be restricted with personalisation and modification options, as it’s unlikely you’ll have the opportunity to alter the vehicle’s functionality or appearance. In this instance, purchasing a car outright may be more suited to you.
On finance plans, you will also be faced with additional fees if you return the car with signs of excessive wear and tear. Each provider will have different definitions, so it’s vital you understand what this means before purchasing.
On the other hand, when you buy a car outright, it’s yours from the get-go. Immediate ownership means you don’t need to worry about any restrictions, so you can drive and customise your vehicle as you please.
Affordability
Cost is probably the main factor when it comes to choosing between the two.
If you can afford a lump sum without being out of pocket, it’s a great option. However, if you’re struggling to save, or don’t want to take out a loan to be able to afford the one-off payment, car finance in Manchester allows you to split the total cost into monthly payments you can afford.
Providers will let you know the payment structure before you sign on the dotted line, with most offering varying models to choose from – e.g. the lowest amount you can pay versus a higher monthly cost to pay off the total cost of the car quicker.
Flexibility
From personal contract purchase (PCP) to hire purchase (HP), there is much more flexibility when choosing car finance. You can let the company know your budget, lifestyle, and outgoings so they can recommend a suitable finance plan.
Depending on the finance type you choose, you can automatically own the car once the agreement has come to an end (HP). Or you can pay a lump sum to own it or trade it in for a different model (PCP) – perfect if you’re a car fanatic wanting to try everything you can, or just like to switch things up often.
In contrast, paying for a car outright often means you’ll have that model until something goes wrong that requires you to get a new car.
Access To Models
When paying in full, your budget is likely to limit your options compared to exploring models through car finance.
Car finance makes managing the cost of a higher-quality or more modern car much easier. It allows you to access advanced features such as improved safety systems, better fuel efficiency, and the latest technology.
Additionally, newer models tend to be more reliable, reducing concerns about breakdowns or costly repairs in the near future.
It’s worth noting that car finance isn’t limited to brand-new models. Many manufacturers release cars with various engine types and specifications to gauge demand before committing to full production. Financing used cars in Manchester gives you the flexibility to choose from petrol, diesel, hybrid, or electric vehicles, depending on your needs and preferences.