Another type of car loan is a hire purchase or lease purchase, where you normally put a minimum of 10% deposit down and then the rest is funded by the car loan company which you pay back over an agreed number of years. In this instance, the car loan company normally pays the funds direct to the car dealer you are buying the car from, so you don’t actually see the money, you just get confirmation from the car loan company and the car dealer that the money has been transferred and the car can then be legally released to you.

Very often there may also be a balloon payment at the end of the loan – the purpose of a balloon payment is to help bring down the monthly payments, and is particularly popular with more expensive cars. At the end of the agreed period you normally either make the final balloon payment and take ownership of the car, or sell the car and use some of the funds to pay off the balloon. Some car loan companies may offer to simply allow you to return the car to them and not make the final payment, or sell the car on your behalf and split the remaining proceeds. Remember in these instances, you are not the legal owner of the car, it is owned by the finance house or car loan company until the final payment has been made, at which point the car will legally become yours. If you intend to sell the car to pay off the loan, you should consult the car loan company to discuss the best way of doing this.

Check out the leading car loan providers listed above and request a free quote for your current car loan requirements. Remember to shop around or use the comparison services offered by some of these providers to ensure you secure the very best car loan deal for your requirements.