Your Options for Honda Car Finance

If you considering buying a new or pre-owned Honda, you are likely to need some form of car finance. Perth drivers often find this topic to be confusing, but here is a basic guide to your options for Honda car finance. 

Hire Purchase:

Hire purchase is a similar type of finance to a mortgage on your home. You need to pay a deposit, then make payments over a period of time agreed in advance. Once the final payment is made and the balance has been settled, the car is yours. The main benefit of hire purchase is that it is simple to understand. There are no complicated terms and conditions; you simply pay the agreed deposit and monthly payments for the agreed term. The term usually runs for sixty months and generally you can cancel without penalty. However, you may find that if you cancel early, the amount owed may be more than the value of the car. The main disadvantage to this type of finance is that the payments are typically higher compared to other forms of finance. In effect, you are paying to hire the vehicle while you pay off the finance. You will often need a large deposit and plan to keep your car for longer than the HP term.

Personal Contract Purchase:

This is a common form of Honda car finance and has a great deal more flexibility. You can usually pay a deposit to suit your circumstances and take the loan over a shorter term. At the end of the contract, there is usually a proportion of the finance which has not been paid. This leaves you with several options; you can surrender the vehicle and treat the contract as if you had hired the vehicle long term, you can pay a balloon payment to settle the balance or part exchange for a newer vehicle, using the equity on the vehicle as the deposit for your new car. This tends to work out as the cheapest option for many private buyers. You are not tied into using the same dealership every time and you may be able to afford a more expensive vehicle without having a much larger monthly repayment. Some buyers use this option and either save to pay the balloon payment at the end of the term or take out another form of finance to cover the remaining balance, allowing them to retain full ownership of the vehicle. Many dealerships will also allow you the flexibility to increase your monthly repayment to reduce the amount of the final payment if you prefer. This flexibility means that you can tailor your finance to suit your current financial circumstances.

Regardless of the type of car finance Perth drivers should always check the terms and conditions of the deal. Some plans have hefty penalties for early repayment, which can make even the most attractive deal potentially very costly should your circumstances change.

If you are looking for a great deal on your Honda finance, contact us. We have a wide selection of Honda vehicles and our sales team would be happy to assist you in arranging the finance for your next vehicle.  

Top Tips for Getting a Great Deal on Your Honda Car Finance

When it comes to car finance, Perth drivers are often a little overwhelmed by their options. With financial institutions, brokers and car dealers offering “cheap” car finance, it can be difficult to determine if you have actually got the best deal on your Honda car finance. However, these top tips should be able to help.

Plan Out Your Budget:

While you may be keen on the latest sporty model, you will need to be realistic. The only way to determine if your choice of vehicle is feasible is to plan out your budget properly. This involves adding up all of your monthly expenses and the cost of running your new car and deducting this figure from your monthly income. The remaining figure is your disposable income and you could use a proportion of this for the monthly repayments on your new loan. If you don’t have sufficient disposable income for a brand new car, don’t despair as there are plenty of great used car finance deals.

Try to Provide a Deposit:

Although funds may be tight, it can be a really good idea to offer to provide a deposit. Even a small deposit can highlight your reliability and investment to any potential lenders. While you will need to ensure that you have enough cash left to cover insurance and other on the road expenses, if you can offer even five percent of the purchase price, you can significantly reduce your costs and increase your chances of approval. If you already have a vehicle, you may find that the dealership will allow you to use this trade in as a deposit on your Honda car finance. This can not only help your finance deal but save you the stress and bother of selling your old car.

Negotiate the Price:

Many car buyers looking for cheap car finance often make the mistake of not negotiating the sales price before they begin the loan paperwork. This can be a costly error and could add hundreds of dollars to the overall cost of your loan. For example, even a price reduction of a hundred dollars could save you lots of cash on interest charges over the three, five or seven years that you are paying the loan. 

Get Quotes:

Another common mistake many people make is to opt for a bank loan for their Honda car finance. While banks and other financial institutions can offer some great deals, the very attractive interest rates advertised are often reserved for people with a fantastic credit history. It is a far better idea to obtain quotes, which you can then compare to any finance deal offered in the dealership. In fact, you may find that the most attractive finance packages are offered by dealerships looking to boost sales and clear out their stock.

If you are in need of car finance Perth drivers should contact us. We have a wide selection of both new and used vehicles, with access to exclusive Honda car finance offers and deals. Our sales team would be delighted to assist you in finding the right car for you with the finance deal best suited to your needs.  

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