Buying a Used Car: Payment Options Part II
The second part of this article is going to address other financial options available for car shoppers.
A large part of consumers prefers to finance the purchase with secured loans. Assets used to secure the loan allow borrowing larger amounts over a longer period of time. When buying a used car with a secure loan the lender becomes a lien holder. The customer is recognized as a registered owner, and he won`t get the vehicle title until he pays the loan in full. If a customer is unable to make monthly payments he will be asked to return the vehicle. Otherwise, the assets securing the loan will be repossessed.
Purchase of Personal Contract
With this financial option, a customer can lease a car (paying a deposit) and keep his monthly payments to a minimum. In fact, this type of agreement offers a greater flexibility; at the end of the deal customer is offered several options:
- to keep the vehicle making the Final Guaranteed Future Value payment
- to return the vehicle to the lender and stop making payments ( depends on vehicle condition and mileage)
- exchange the vehicle paying the difference in its value as a deposit for a new car
When buying a used car at the dealership a customer can be offered another payment options known as Hire Purchase. It`s a form of contract in which car buyers agree to pay for the vehicle in parts or a percentage at a time. Hire purchase in the United States and Canada is known as an installment plan. Customers are due to pay the full car price plus interest over an extended period of time in equal installments until it`s paid off.
Customers buying a used car are probably to incur auto financial scams: yo-yo financing, contract packing, credit score scam etc. At the Margarian Law Firm, we are protecting rights of used car buyers when they encounter car dealer fraud including auto financial scams.