MOTOR FINANCE METHODS

2007-05-02 10:04:19

( Insurance )



Personal loan, hire purchase and personal contract plans are three types of motor finance available in the market today. Each type of motor finance has its advantages.

Personal Loan

Personal loan is an unsecured method of financing motor purchase. You can avail motor loan under personal loan since it is a consumer loan approved for personal use. Applicant’s previous credit history and level of income compared to amount of debt including payments for motorcycle loan currently applied are the main basis for approving personal motor loan.

Availing motor finance under personal loan gives borrower the advantage of not putting up collateral to avail loan. Thus, borrowers with no tangible assets but have good credit history can easily pass through the requirements and processing for motor finance. They will not get through the hassle of securing their loans with tangible assets or wait for longer periods until they can accumulate tangible assets to secure their motor finance applications. Consequently, home owners need not put their homes as collateral when applying motor finance under personal loans.

Hire Purchase

Hire purchase method involves installment payments for motor finance for over an agreed period until the purchaser finish paying the entire amount of the motorcycle including interest payments. The ownership of the motorcycle remains with the lender within the installment period. Transfer of ownership is done upon full payment of the principal loan and interest.

You can negotiate for a hire purchase agreement as method for motor finance with non-financial institutions. You can negotiate with dealers and manufacturers to provide you a good deal on this method of motorcycle financing. These financers can provide you a good deal particularly if you are a repeat customer. Also, they do not normally require security to finance your motor purchase. Although, a down payment is required that is minimal in amount.

Personal Contract Plans

Personal contract plans is a method of motor financing for individuals who wants to own the vehicles of their dreams such as class B motor homes where it serves as their own living quarters on the road. It is a conditional sale agreement where you create a term of contract with the dealer or manufacturer where you pay monthly payments for the use of the vehicle. You then have the option to buy the vehicle at the end of the term of return it to the dealer or manufacturer. Resourceful individuals to avoid the cost of motor depreciation use this method of motor financing.


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