Car Leasing VS Car Loan

There are a couple of ways you can fund a new car and if you are not one of those people who can buy a car outright you will need to find some sort of finance deal. However, even if you have sufficient capital to purchase a new car straight away you will still face the prospect of depreciation.

Cars sold within their first seven years will lose money and any value attached to the car, depreciates considerably over this period. It is estimated that your new car will be worth 20% less the second you take it off the forecourt and this loss on your investment continues over time.

Many people who have brought cars through personal finance agreements or used a dealer arranged finance package find that once they decide to get a new car that they suddenly find themselves in negative equity. This is due to the residual value of the car being considerably less than the outstanding amount owed on the loan.

At this point you are faced with two options, the first and most sensible choice is to continue paying for your car until the agreement is finished, then you will own the vehicle outright and can use the little remaining value as deposit on a new car.

The second option that finance brokers will suggest is that you include the settlement fee in the car as part of the finance package for the new car. So instead of buying a car for say £8,000 your include your £2,000 negative equity and take a loan for 10,000.  When you decide to trade in the car in three years time you are still faced with the problem of negative equity, only this time it will have doubled as you already had £2,000 when you brought the car.

The most sensible way to fund a new car is through personal car leasing or contract hire. Previously this has been associated with business vehicle financing but more car dealers are seeing this as a way to provide private customers with new cars too. Instead of buying a new car outright your take out a contract, agreeing to a specific duration and mileage and at the end of the period you hand the car back.

Where you gain, is that instead of funding the total cost of the vehicle, plus finance costs and fees, you are only paying for a proportion of the car and its costs and fees. So a car costing £20,000 with a residual value of £13,000 after three years, you pay for the £7,000 over that period. Whereas if you buy a car outright you are paying for the whole £20,000 over three years and then have the problem of depreciation and negative equity when you come to sell the car.

Car leasing is a more sensible finance deal and although you will not own the car after the period you are free to change your car for a brand new one without the penalties of depreciation and negative equity hanging over you.

For more information on car leasing deals check out Auto-Owl Vehicle Leasing. Also, Automotive Blog is a new blog site dedicated to the automotive industry to bring you the latest news, car reviews and information.

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Poor Credit Home Equity Loan

Have you been hesitating to apply for loans because of your bad credit rating? Because credit ratings are very important if you want to get a loan, you always need to be aware of your score. Having a bad credit rating can put you in a handicap position when you are applying for any kind of loan or credit. Fortunately, if you do own a home, it is possible for you to get a poor credit home equity loan.

The advantage of owning a home with equity is that banks will look at you more favourably when you apply for a home equity loan. These loans are secured loans that offer banks security because if you were to default on your loan, they would foreclose your house and recoup their investment. Home loans also have the advantage of lower interest rates than traditional unsecured loans. Because you have collateral backing the loan, the banks will give you a lower interest rate.

Usually the term of a home equity loan is shorter than the original mortgage; however the interest rates are a bit higher on these loans. Especially if you have a bad credit rating, you can expect to pay a higher interest rate on top of the normal interest. As stated before, bad credit increases the risk on lenders because you have a higher chance of defaulting on you loan.

When you are looking for a poor credit home equity loan you should start online. The internet is a great place to start looking for a good deal on a loan. Especially because of all the competition that is available online, you can be sure to find a good home equity loan that is right for you.

Getting a Home Equity Loan with bad credit can be very difficult if you don’t look around. Start by searching online and you will find many lenders willing to give Poor Credit Home Equity Loans if you have some equity in your house.

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