Car Finance loans

Car Finance loans

Car finance loans normally come in on of two guises.

The first is a straight loan to you using the car you are buying as collateral. In other words you owe the money and you own the car. If you fail to make the repayments the bank or finance company is entitled to repossess your car. Once you have paid back 50% of the loan however they cannot take back the car but need to pursue you through the legal system for the money.

The second type of car finance loan is really a 'rent with buy option'. This means that you owe the money for the car but you do not actually own the car. This makes it easier for the finance companies to repossess as the car is legally theirs. The last payment of the loan is called the option to buy. You make this payment and you then own the car. It's not really an option as you are not likely to say you don't want the car with only one payment left!

Either way if you keep up the repayments all will be well. Of course if you do not then the finance companies or banks will put those details on your credit report and that will have obvious consequences and the chances of future car finance loans will look bleak indeed.

Click on the following link for more details on car finance loans.