The various financial products, which allow an individual to get a car without any issues on the payment area is referred to as car finance. These provisions can be used for new and well as second hand cars where the finance companies settle all the funds to the dealer/ manufacturer or the pre owners on an individual’s behalf. Car Finances are popular for both business and private individuals. Personal car finance includes products like car loan; car leasing, hire purchase, contract purchase etc. are a few to name.
Car finances are mainly required because the sum of sum of money required to buy a car cannot be managed by an individual without any help in the monetary sector. The funds are generally provided by the retail banks or any finance company that specializes in car finances. Companies like Ford and General Motors have their own financial wings, which helps to finance the customers for their car purchase. Usually the car ownership documents are retained by the finance provider until the loan is repaid back as agreed.
The recession of 2008 saw a huge downfall in the sector of pre-owned car market. The finance providing organizations had to sell off their available returning cars on heavily lowered prices than expected thus facing a massive loss. Contact hire for private cars were totally stopped during this period by majority of the companies. Some associations like ‘Finance and Leasing Association’ in the UK and ‘Federal Trade Commission’ in the US explains the various aspects of car finance thereby protecting the consumer rights.