Are you getting the best car finance option on your new 12 plate car?

March 9, 2012 - PRLog -- March marks the launch of the new 12 number plate. Despite the current economic climate the car industry saw an increase of 0.03 per cent at the start of 2012, with 128,853 more new cars being sold in January than the previous month. Although the SMMT is not expecting an increase in new car sales for 2012, there are other organisations such as Autotrader.co.uk that expect it to be a good year for the car industry with the release of a number of new models, and they expect the increase in sales to continue throughout the year.

Of the 1.92 million people that are expected to buy a new car in 2012, more than 60% of these are likely to take out finance directly from their dealership. Indeed, according to the latest figures from the FLA (Finance & Leasing Association), the trade body for the motor finance industry, in 2011 62.9% of all new cars were bought by consumers using dealer finance, almost ten percentage points up on 2010.

However, with the advent of new finance products such as PCP or leasing, it is important to shop around because the monthly price does not only depend on the car price and the rate of interest of the car loan but also on the residual value of the vehicle. For example, PCP or Personal Contract Purchase is when you pay a fixed monthly fee for your vehicle. This is usually for a period of two to four years and at the end of the contract you have the option of paying a final amount to gain full ownership of the vehicle; or opt to hand the vehicle back to the finance company. The main advantage of taking a personal contract purchase agreement is that you can reduce the amount you pay every month as you will be financing the depreciation of the vehicle during the finance agreement (usually between 2 to 4 years) and not the overall cost of the vehicle. However, despite the large take up of people choosing to go for a PCP deal, which now represents as much as 60% of all dealer finance, is it is not necessarily the cheapest option available.

If a personal contract purchase is not for you, you may want to consider a leasing option such as personal contract hire or PCH. Personal Contract Hire is very similar to Personal Contract Purchase but you will not have the option to purchase the car at the end of the finance term. Personal Contract Hire is often cheaper than PCP, but it is important to shop around and compare like with like. The main disadvantage with Personal Contract Hire is that you will not have the option of owning the vehicle at the end of the finance period. PCH is therefore a very good option only if you intend to change cars every 3 to 4 years.

These are only a couple of the possible finance options that are available to you.  Finding the best finance deal can be time consuming, however London based business FinanceAcar have come up with a simple solution, instant finance price comparison. The team at FinanceAcar can save money for anybody looking to buy the new 12 registration plate as quickly and easyly as possible.

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Finance A Car (http://www.FinanceAcar.co.uk) is a new car and finance specialist. It is the UK’s first car finance marketplace and it enables car buyers to choose their car, compare finance products, apply for finance, buy the car and have it delivered.