Whether you want to upgrade your current golf or it’s your first car, consider getting some financial assistance. Buying any new car, not just a golf, can be very exciting, however, if you’re buying it on finance, it can quickly become very stressful.
No matter which golf GTI model you are considering buying, the most important thing you need to do is understand the financial options you have.
This article will walk you through the process and give you a good idea of where to start and what to consider.
Table of Contents
Budget
Before you start looking at your financial options, you need to assess your financial situation. Knowing your budget will make the entire process easier as you’ll be able to narrow down your options and make a choice from them.
Calculating how much you can realistically afford to spend each month will make sure you can meet your monthly payments. It’s important to avoid borrowing more money than you can comfortably repay and try to keep the monthly payments as a manageable portion of your income to prevent financial strain and unnecessary stress.
Researching your financing options
There are multiple financing options to choose from when it comes to car finance. Here is the breakdown of the main three options:
- Hire Purchase (HP): Hire Purchase is a type of car finance that allows you to buy a car and pay in monthly instalments over several months or years. It usually requires a deposit of around 10% of the car’s worth. However, this isn’t always necessary. Once you pay your last payment on the car, you become its legal owner and get to keep it. In essence, you are renting/hiring the car until you pay off the instalments. Ideal for those who want full ownership of their vehicle.
- Personal Contract Purchase (PCP): PCP is the type of loan that allows you to buy a car without paying the full cost upfront. It has lower monthly payments than hire purchase car finance, so it’s considered a more affordable option, especially if you change new cars regularly. You will need to pay a deposit and make monthly payments until your fixed term is over. Then, you have three options: hand back the car, trade it in and start a new PCP agreement, or keep the car by making a balloon payment. This type of loan is favoured by those who enjoy driving a new car every few years and want lower monthly payments.
- Leasing: Leasing, also known as personal or business contract hire, is a long-term rental, no ownership lease. It usually lasts between 24 to 48 months, and at the end of the contract, you simply return the vehicle. This is a great option for drivers who prefer to drive the latest models with minimal long-term commitments.
Make sure you compare things like the interest rates, loan terms, and down payment requirements to find the best option to suit your financial needs.
Check your credit score
Your credit score significantly affects the interest rate you qualify for. While lots of brokers prefer a great credit score, it is often not necessary. Some brokers often work with customers with bad credit scores and help them find a great deal that works for them.
Before applying for Golf GT finance, it is necessary to check your credit report for any errors. If your credit score isn’t the best, don’t panic. Buying a car on finance can be a great way to improve your credit rating. That is as long as you keep up with your monthly payments.
Understand the terms
Before signing any paperwork, make sure that you carefully read and fully understand the terms and commitments which come with the loan or lease agreement. Pay attention to factors such as interest rates, monthly payments, and any additional fees or changes.
Researching fees and interest rates carefully before signing anything could also be useful, as a longer-term loan may sometimes result in lower monthly payments but a higher overall cost.
Ready to navigate your Golf GTI finance?
By following these steps, you can confidently and efficiently navigate your Golf GTI finance options and be able to buy the car of your dreams. If you remember to take your time, do your research, and make decisions that align with your financial goals, you should have a stress-free journey if you’re struggling to find the deal that you like, book a consultation with Enjoy Finance as they can help you find the best deal for your budget.