Finance at Mansfield Auto Exchange

Car finance is a financial arrangement that allows individuals to acquire a vehicle without having to pay the entire purchase price upfront.

It offers a flexible and convenient way to spread the cost of a car over a period of time, making it more affordable for people who might not have the immediate funds to buy a vehicle outright.

Hire Purchase (HP): With HP car finance, you pay an initial deposit followed by fixed monthly installments over a predetermined period, typically ranging from 2 to 5 years. Once all payments are complete, ownership of the car is transferred to you. During the agreement, the finance provider technically owns the vehicle.

Some key points to consider about HP car finance:

1. Deposits: You will usually need to make a deposit upfront, which is a percentage of the total car price. A larger deposit can result in lower monthly payments.

2. Interest Rates: The interest rate on an HP car finance agreement can vary based on your credit score and the lender's terms. It's important to understand the interest rate and how it impacts your total repayment amount.

3. Monthly Payments: Monthly payments are fixed throughout the repayment period, making it easier to budget and plan for your expenses.

4. Ownership and Mileage: As the finance provider technically owns the car until the final payment, you might have restrictions on modifying the vehicle or exceeding a certain mileage limit until ownership is transferred to you.

5. Early Repayment: In some cases, you might be able to make early repayments to settle the agreement sooner, potentially reducing the overall interest paid. However, there might be penalties for early repayment, so it's essential to check the terms.

6. Credit Check: Since HP car finance involves lending money, lenders typically perform a credit check before approving your application.

7. End of Agreement: At the end of the repayment period, assuming all payments have been made, ownership of the car is transferred to you. You now have the choice to keep the vehicle, trade it in for a newer model, or sell it.