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| Guide to Car Loans
What's the difference between car loans and car finance? There are two main types of lending available when you haven't got enough capital of your own to buy a car outright, these are: It's important to understand the difference between them!
Car Loans are offered by banks and general finance companies and are similar to other types of simple loans. With a car loan you can use the lump sum you've borrowed to pay for the car in full and take immediate possession of it. You then repay the loan back to the lender as agreed. Because you have paid for the car in full you legally own it so you can do what you want with it including selling it on. The table below outlines the types of lending that can be used to do this:
Car loans can work out cheaper overall than other car financing options. Car Finance agreements are a contract to pay regular monthly amounts to a car finance company either directly to them, or through a car dealership or manufacturer, to have the use (hire) of a car as if it was yours, for a fixed amount of time (finance term), usually between 12 months and 3 to 5 years. The main difference with Car Finance is that although the car is in your possession, you do not legally own it, the dealer or manufacturer still has legal 'title' over it for the duration of the finance agreement. Car Finance agreements are offered by car manufacturers, car dealerships, car finance companies and car finance brokers, the most common types of agreements are outlined in the table below:
Download the Car Loans PDF Guide here - see our other free PDF guides here What are car loans? main menu << previous page next page >> |
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