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Need Car Financing- Know the Pros and Cons

Car financing is the latest trend in the market and a good majority of new cars are sold in the manner. In fact, it is becoming unusual for anyone to purchase a car directly by paying cash. Financing enables the customers to pay a certain amount of money every month which helps them in budgeting properly and manage finances while taking advantage of the car. There are various car dealers like the Philadelphia Hyundai Dealer which provide such financing options to assist the customers. However, not all firms are reputable or credible and they try to egg out money from unsuspecting customers.

Pros and Cons of Car Financing

Not all is rosy about financing and there are several pros and cons to this practice. The pros and cons include:

  • Hire Purchase- This is a method of financing for 10 year old cars. It demands a high rate of interest than personal loans because it can be made available to people with poor or fair credit history. The biggest advantage of this method is that the car will be yours in the end of the period. However, the con is that payments are higher and also the fact that if you wish to modify the car, you will have to pay the money onetime.
  • Specialist Car Finance- These loans are available from companies which are not bothered about your credit history and specialize in car loans. However, the process is expensive because the companies do find out about history and charge it in the form of interest for compensation. This is its disadvantage. While the advantage is that arranging the loan is extremely easy.
  • Personal Contract Purchase- This contract has a peculiar term that the buyer can pay low monthly installments but he/she must clear the entire amount by making a hefty payment at the end of the term and take the car otherwise simply return the keys. It also requires deposit at times which will be adjusted in your entire payment amount. The benefit is that the installments are low and you can drive away with a brand new car without shelving any money in the first instance. However, the balloon payment is fairly large.
  • Zero Percent Finance Deals- This is one of the most cost-effective ways to buy a new car if you have cash. The concept is to take the finance against the cost of the vehicle without paying any interest. In this way, you will own the car when the agreed loan period gets over. The biggest pro of this arrangement is that you do not have to pay any interest for the car cost while the con is that deposit of around 40% of the car value is mandatory.

The Hyundai Dealer Philadelphia along with all the other car dealers provides one of the other of these financing options. In fact, some of them provide all of these and make it easy for the customers to choose from. Choose whichever is best for your financial condition and ride your new vehicle.

 

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