If you considering buying a new or preowned Honda, you are likely to need some form of car finance. Perth drivers often find this topic to be confusing, but here is a basic guide to your options for Honda car finance.
Hire purchase is a similar type of finance to a mortgage on your home. You need to pay a deposit, then make payments over a period of time agreed in advance. Once the final payment is made and the balance has been settled, the car is yours. The main benefit of hire purchase is that it is simple to understand. There are no complicated terms and conditions; you simply pay the agreed deposit and monthly payments for the agreed term. The term usually runs for sixty months and generally you can cancel without penalty. However, you may find that if you cancel early, the amount owed may be more than the value of the car. The main disadvantage to this type of finance is that the payments are typically higher compared to other forms of finance. In effect, you are paying to hire the vehicle while you pay off the finance. You will often need a large deposit and plan to keep your car for longer than the HP term.
Personal Contract Purchase:
This is a common form of Honda car finance and has a great deal more flexibility. You can usually pay a deposit to suit your circumstances and take the loan over a shorter term. At the end of the contract, there is usually a proportion of the finance which has not been paid. This leaves you with several options; you can surrender the vehicle and treat the contract as if you had hired the vehicle long term, you can pay a balloon payment to settle the balance or part exchange for a newer vehicle, using the equity on the vehicle as the deposit for your new car. This tends to work out as the cheapest option for many private buyers. You are not tied into using the same dealership every time and you may be able to afford a more expensive vehicle without having a much larger monthly repayment. Some buyers use this option and either save to pay the balloon payment at the end of the term or take out another form of finance to cover the remaining balance, allowing them to retain full ownership of the vehicle. Many dealerships will also allow you the flexibility to increase your monthly repayment to reduce the amount of the final payment if you prefer. This flexibility means that you can tailor your finance to suit your current financial circumstances.
Regardless of the type of car finance Perth, drivers should always check the terms and conditions of the deal. Some plans have hefty penalties for early repayment, which can make even the most attractive deal potentially very costly should your circumstances change.
If you are looking for a great deal on your Honda finance, contact us at (08) 9317 5700 or visit http://www.prestigehonda.com.au/ . Our sales team would be happy to assist you in arranging the finance for your next vehicle.