Finance Facilities to Purchase a Car

When you want to purchase a car it is not necessary to pay the entire value of the car up front even if you have the financial strength to do so. Instead, you could pay a fraction of the value at the beginning and pay the rest in monthly installments. This way you have the option to buy the car without causing much burden on your pocket. In a couple of years automatically the car becomes your property. There are many benefits when you finance the purchase of a car this way. The main benefit is that you are able to get tax deductions.

Even if you buy the car with financial help from a hire purchase company, if you have paid all your installments and own the car, you will find it difficult to sell your car unless you sell it very cheap. In case you had some installments to pay, the buyer has to pay only a smaller sum to you and he could pay the balance to the finance company in monthly installments. Under such a situation, your car will have a better demand as those who by used cars are not well placed people.
When you want to seek finance to buy your car there are different ways to do it.

• Car lease.
• Commercial hire purchase.
• Chattel mortgage.
• Novated mortgage.

Car lease
When you buy a car with this method, the finance company will purchase the car and will give it on a lease agreement to the user. User in turn is expected to pay a certain amount of money by the end of the contract. In case he wants to purchase the car at the end of the contract, he could do so.

Commercial hire purchase
Here also the financier will do the purchasing and he will provide the car to the user on an agreement but the installment is adjusted in such a way that when the final payment is made to the financier the car automatically gets transferred to the buyer.

Chatted mortgage
In this case the finance company will buy the car and transfer the ownership to the buyer. The agreement is written in such a way that if payment is defaulted the financier has the right to claim for the car.

Novated mortgage
This method is used to deduct the installments from the salary.

You have the option to select the one that suits you best out of the four schemes.

Article source: http://ezinearticles.com/6135201