What Type of Car Finance Is for You?

Personal Loan

Personal loan is perceived to be the most popular way to finance a car according to many surveys.

Borrowing money from a bank, building society or other lender gives you instant ownership of the car. Comparison websites such as money supermarket will show you which lenders offer the best deals.

The annual percentage rate (APR) is the easiest way to compare loans, and essential in working out how much a loan will cost you over the repayment period chosen. If the APR isn’t mentioned then ask the question, the headline rate is not always what you get it depends on your individual credit rating.

It’s a temptation to take a longer repayment period which makes the monthly repayment smaller but you will pay more interest. Keep the loan period as short as possible.

The downside to a personal loan unsecured is that in the event of default any of your assets could be seized. With dealer finance only the car is at risk in the event of payment default.

Go for a personal loan if you say YES to any of the following:

• You don’t have any deposit
• You want to own the car outright
• You plan to keep it for a while
• You don’t want annual mileage restrictions

Hire Purchase

After a bank loan hire purchase (HP) is the easiest way to buy a car.

Under HP agreements there’s usually a deposit to pay, typically 10% followed by fixed monthly payments. The car is owned by the HP funder until it’s paid for including any option to purchase fee. At that point the customer has the right to sell the vehicle.

However some customers do sell their cars before the final payment and the good news is for buyers of non-paid up cars is that the law protects private purchasers who buy without knowing the car is not fully owned and no matter what the police or anyone else tells you will get good title if you buy a car on HP in these circumstances. The finance company can ultimately take action against the seller but that’s not your problem.

The credit on an HP agreement is secured against the car, so it’s like dealer finance in that the car can only be seized in the event of default. If you need to sell the car before the end of your agreement you will have to settle the outstanding monies first and early settlement fees may apply.

Go for HP if you say YES to 1 of the following:

• Ultimate ownership is important to you
• Your budget and circumstances suit fixed monthly repayments
• Your disposable income may decrease over the agreement term (eg if you’re planning a family)
• You like credit secured against the car only
• You don’t mind not owning the car until the debt is fully paid.

Personal Contract Purchase (PCP

This product is probably the most popular product of all.

It’s a bit like HP in that you pay a deposit, a fixed rate if interest and monthly repayments usually over 12 to 48 months.
Where PCP differs from HP is at the end of the agreement you have 3 choices.

1. Return the car to the supplier
2. Keep the car
3. Trade the car in against a replacement

The first option returning the car costs nothing, unless you’ve gone over an agreed mileage or returned the car in poor condition. In either case there will be an excess to pay.

Keeping the car means making a final “balloon” payment. This amount is the cars guaranteed future value, or GFV, which is set at the start of the agreement.

The GFV is based on various factors, including the length of the loan and the anticipated mileage as well as the cars projected retail value. If you exercise this final buying option, you can continue to run the car, or you can sell it and pocket any equity above the GFV that you have paid back to the finance company.

If you’re trading in your car, any GFV equity can be used as deposit towards its replacement.

If your car has gone into negative equity which can happen you will have to make up the difference. Shorter agreements are more likely to accurately project the GFV.

Go for PCP if you can say YES to 1 of the following:

• You want lower monthly payments
• You like the flexibility of options at the end of the agreement
• Trade the car in against a replacement

Personal contract hire (PCH)
This product is basically renting your car for typically 2 or 3 years with an agreed mileage limit. There is no option to buy the car at the end of the contract you just hand the car and the keys back to the finance company. Your payments are covering the cars depreciation.

While you’re running it, you’re responsible for its upkeep. On the plus side, the deposit is low as are the fixed repayments and you can negate the impact of repair bills by including a maintenance element into the agreement.

Cars that hold their value well are a good PCH option because the difference in their new and three year old values will be smaller so you will repay a lower amount whilst cars that plummet in value will see you pay more.

Go for PCH if you can say YES to 1 of the following:

• You don’t want to own the car or suffer its depreciation
• You like being able to change cars often
• You like the idea of driving better cars than you could normally afford
• You don’t mind looking after cars

Dealer Finance
Research is a must here as motor dealers love lazy buyers who haven’t done their research. There is no point in haggling on vehicle price if you waste it all on a poor finance deal.

Check out detail on current and forthcoming manufacturer finance deals. These might include interest free or low APR rates or deposit contributions.
Don’t fix on the rate or monthly payment though look at the total repayable to understand the total cost and compare with what you can find in the open market.
Also don’t assume that a dealers finance rate is set in stone, everything is negotiable. Take time to go through things you are not sure about and get the final offer in writing.

The only thing at risk if you don’t keep up dealer finance repayments is the car. Bear in mind that even with sweeteners thrown in the dealer will still make money somewhere in the deal and you are paying for it.

Go for dealer finance if you can say YES to 1 of the following:

• You like the convenience of “package” deals
• You’re happy to do some comparison research
• You don’t want to do the research but you don’t mind paying extra

Self – finance
If you want to own your car using your own money by buying outright it does make some sense when UK savings rates are so low. Buying a car outright is also a sensible alternative to leasing if your mileage is high or unpredictable because of excess mileage charges.

Using a credit card be an advantage as many funders offer 0% on balance transfers and purchases. You can avoid paying interest charges altogether by changing you card at the end of interest free periods.

Actions to Do If You Want Your Personal Finances to Improve

At the turn of each year, we all have our dreams and we possess new energy levels to achieve them. This individual expectation is like a cycle. Everybody wants to succeed, at least in their minds but not everybody will. Below is a list of 25 actions you should take if you want to improve your personal finance this year.

1. REVIEW THE PAST YEAR: The first thing you should do is to analyze the past year. Research has shown that of the lots that make ‘new financial resolutions’ every year, less than 10% actually get to follow those resolutions through the year. Does it not bother you that at the beginning of last year, you also made resolutions that you failed at? Why turn around in cycles every year? Take a pen and paper, sit down and review your financial activities for the past year; from your income earnings to spending. Break everything down into tiny bits and you will have a clearer picture of why some of your financial desires didn’t come to pass. It could be that your total expenditure outweighs your income.

Simple Guide: Create a ledger of credit and debit. Every of your income, no matter how little, should come to the credit side while expenditures come to the debit. Sum each side up. If your debit is over 30% of your credit, do you still wonder why that financial dream of yours was out of reach in the past year?

2. CREATE A CHECKLIST OF ALL YOUR FINANCIAL MATTERS: The second step is to create a checklist of all your financial matters, while including ‘Emergency’ as the last in the checklist. This is because emergency situations will always arise and can dent your plans, if you are not adequately prepared.

The best way to create this checklist is to break each financial matter down into months. Many people go through the year with false belief that they have everything sorted out in their heads. The more reason they fail because human beings are susceptible to memory loss. Sort them out in black and white instead, and a new level of motivation will come on you each time you look at the checklist. Alternatively, tools such as PocketGuard and Spendee can help you do this.

3. SET SPECIFIC FINANCIAL GOALS: After creating the checklist, the next step is to set your financial goals complete with specific dates. That is only when your wishes become goals since the dates act as deadlines thereby putting you on delightful pressure to beat them. Any goal without a specific date of achievement is not a goal. You are merely wishing. Sadly, this is what many people do.

By specific, I don’t mean you saying you will make a million naira in August 2018. Be more specific with date. Rather, say ‘August 30, 2018′ for instance. Then it becomes a goal that you can wake up every morning and chase around.

4. KEEP A FAITHFUL BUDGET: The failing of many people is that they are never faithful to their budget. This shows indiscipline. Learn to set and work within budget. That way, you can meet most of your financial plans and obligations. Going beyond budget will only put you in bad debt and make you miserable. If you cannot plan your budget in black and white, there are wonderful digital tools such as Wallet and Personal Capital that enables you to do this and carry your budget around in your phone. Some others like PocketGuard even alert you that you are already spending beyond budget. Take advantage of these tools for better living. One thing you must never do is to simply budget in your head.

5. SPEND WHAT IS LEFT AFTER YOU HAVE SAVED: Learn to live by this rule today. For every dime you earn, save at least 10% of it. Now, this is the difficult part: many people aren’t disciplined enough to do this. The key to achieving this is to separate your business income from your personal finance.

6. LEVERAGE ON GOOD DEBTS AND AVOID BAD DEBTS: Everybody should like debt. This is a principle of the wealthiest people in the world. They like good debt and abhor bad debt. Good debt brings you more cash flow and if well managed, sets you towards financial freedom. Bad debt on the other hand, brings you unneeded luxuries, put serious pressure on you and can make you miserable. If you must boost your personal finance in 2018, try to avoid bad debts.

Good debts are incurred towards fulfilling rewarding financial obligations like the purchase of businesses, investment and stocks or real estate; these are things that will compound your financial interests over time and make you independent. Bad debts are taken out to buy non-essential luxuries such as cars, holiday trips and best proposal dinner. These luxuries don’t compound wealth. Rather, they take what you already have. Decide which one you want.

7. PAY OFF YOUR SMALLER DEBTS FIRST: By now, you must be saying ‘but I am in debt already. My debtors are breathing down my neck’. All well and good. Make it a point of focus to liquidate your bad debts. Start by making a list of your bad debts in order of their sizes. Then settle the smaller debts first. Any debt that is fully settled should be cancelled out before moving to the next.

The logic behind this is simple. The smaller the debt, the easier it is to pay off. With each debt cancelled out, the more confident you will become of liquidating the bigger ones. This confidence brings with it desire not to keep going through the show of cancelling out debts every year. In other words, you’ll become a better manager of your finances.

8. LIVE YOUR MEANS: This must be a strange one. I have heard many people advocating that people should live below their means in order to have reasonable savings. Well, I actually believe people should live their means. If you can afford to conveniently buy out a business, why not? The key to living your means is convenience.

In measuring your convenience level at taking on situations, you must be truthful to self about your financial situation. You might be on a 100, 000.00 Naira per month wage and feel you can live in a two bedroom apartment in town. You should calculated the other supervening expenses like monthly feeding, clothing, welfare and transportation to know how much you are left with to contribute towards the means you want to live.

A simple rule I advocate is this: if a personal financial project is more than 10% of your actual income, then you might be better off living below your means.

9. AVOID HAVING ENTITLEMENT MENTALITY: As a major, nobody owes you anything in life. So quit that lazy mindset. In business as in your personal finance, you are solely responsible for the decisions you make; for your successes and failures. Once this is firmly ingrained in your mind, the zeal not to fail will become a greater motivation that pushes you towards making smart financial choices. You will learn the act of taking responsibility. The most successful entrepreneurs don’t sit down and wait for goodwill from some family members or friends. They struggle their ways through web of failure until the elusive success is captured. Then they work harder to keep the success. You should also have that mindset.

10. AVOID THE LOTTERY: This might not go down well with some lottery lovers but if you don’t have firm control of your personal finance, then stay off the lottery. People ask and I tell them lottery is business of luck based on correct punditry or guessing of a given situation. You expend money time and time again in the hope of becoming lucky and hitting the jackpot. But what if you don’t? Let us even assume you win. Have you taken stock of how much you have contributed to the lottery over the months and years and if what you won is up to your contribution? A few will be lucky to hit it big. However, a vast majority of people won’t. The wealthiest people know that waiting for some big manna from heaven is a lazy way of understanding the concept of luck. They know that luck is a deliberate effort of an individual therefore they diversify their portfolio before engaging in lottery.

Why Early-Stage Startup Companies Should Hire a Lawyer

Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.

The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?

They Know What’s Best for You

Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.

Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.

They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.

Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.

They Contribute to the Increase in the Value of Your Business

Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.

They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.

Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.

Wrapping Up

All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.

Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.