Car Loans are offered by lending institutions such as banks and building societies. They are available in a variety of formats.
Many car dealers and manufacturers will offer incentives on new cars. Some will pay your insurance for a year or offer you a cash back cheque.
One of the most attractive offers a dealer can present you with is interest free credit. This means that you do not have to pay any interest on the money you borrow to pay for the car, which will save you money and help you to pay off the loan much more quickly.
The downside to this type of financing is that you often have to pay a large deposit upfront, sometimes as much as fifty percent of the value of the car. This could mean forking out thousands and thousands of pounds, depending on the value of the car in question.
You should also be aware of the terms set out in the loan agreement. Interest-free car loans can be an excellent solution to your car finance worries, but make sure you read the small print carefully. Some car dealers will ask you to pay back the loan in full, sometimes as soon as a year after the sale, and some will stipulate that you cannot sell the car during the loan term.