Understanding car finance

There are many people out there who want to become car brokers. It’s our job to help them do this. To do so, we provide ‘How to Become a Successful Car Broker’. This is a comprehensive suite of modules. They make up our complete Car Broker Business Package. It includes everything you need to learn and isn’t available anywhere else.

When you are purchasing a car, nearly every car supermarket, dealer, or car broker will supply you with a finance scheme. It is a massive source of profit in the motor industry. There are many financial plans in existence. What we are going to do is explain how they work. We will look at payment options and the benefits of each. Furthermore, we’ll see what you must be aware of before signing anything.

Hire purchase

Car brokersUp first is HP. This is secured against the actual vehicle. You don’t own the car until you make the last payment. Also, you will need the lender’s permission to sell, although you are able to return it. Usually, you pay a deposit and repay the balance in instalments, plus interest, over the loan period. Once it concludes, you own the car completely.

Just be aware that if you miss any payments, the car can be repossessed. This can also be more costly than independent bank loans. Servicing could be included too. Examine all terms and conditions and don’t be afraid to ask, whether you are buying from a dealer or using car brokers.

Personal contract purchase

The second type of finance is PCP. Normally, it involves paying a deposit and low monthly instalments over fixed periods after. When they end, you are either able to purchase the car outright or pay a lump sum. You can also sell it to pay off the remainder or return the motor. This suits those who like changing cars frequently. It is based around a ‘minimum guaranteed future value’ (MGFV) for the car.

With PCP you need to be aware that it is vital to adhere to the mileage restrictions. Keep the car in good condition to prevent penalties as well. You are only hiring the car; you won’t own it until you make the balloon payment. This could be less cost efficient than HP if you intend to keep the car though.

Personal leasing

Finally, there is contract hire. It is similar to a PCP because it has monthly payments. However, you don’t have an option to buy your car. Saying this, it is easy and convenient to change the vehicle. The mileage limits, length of contract, and type of car dictate the whole leasing cost. You’d typically have to pay up to three months’ rental in advance too.

A great piece of advice here is to always compare deals, even with car brokers. Take into account the total amount repayable, monthly payments over the period, and APR. Look at any more ‘option to purchase’ and administration fees.

0% finance offers

Deals such as these are usually to move a slow-selling or outgoing model. They can work out affordable, with zero interest on the monthly repayments. Remember that they can frequently come with a big deposit (35% or over). You probably won’t have the opportunity to negotiate any additional discounts. What’s more, if you miss payments, you typically switch to a scheme with a bigger interest rate.

Start using our modules and join the UK’s car brokers

At Auto Car Brokers, we use our business package to teach clients all the ins and outs of this trade. With these modules at your disposal, you will be able to get your own business up and running smoothly. We cater for everyone’s needs too. You can purchase what you want when you want it.

So, feel free to speak to us if you want to know more about car brokers. It could be the perfect thing for you, whether as a second job or a new focus.