Buying your car with cash means you own it straight away, so if you got into financial difficulties you could sell it.
If you’ve bought a car using a finance agreement such as personal contract purchase (PCP), personal contract hire (PCH) or hire purchase, the finance company owns the vehicle during the contract.
What insurance do I need for a financed car?
While your state will require you have at least your state’s minimum liability insurance on your vehicle, if you have a lien holder on the vehicle, they will require you to carry liability insurance, collision insurance, and comprehensive insurance (often termed “full coverage”).
Can I get a title if my car is not paid off?
It may be possible to get a title loan with a vehicle that you co-own with another, however. You must have a paid-off car loan: Title loan eligibility depends upon whether your car is paid off and lien-free.
Can you use a financed car as collateral?
If you own your car outright, you could use it as collateral. If you have a car loan, you might have enough equity. You would need to owe less than its value. To find out, estimate your car’s value at one of the car pricing sites such as Edmunds.com, and compare it to the payoff amount of your car.
Does car finance include insurance?
Streamline your car buying experience by taking out combined car finance with insurance. Buying a car can be an expensive time, and few people can afford to buy a new car and pay for a year’s insurance outright. Meaning all of your motoring costs other than fuel are covered in one simple payment.
Photo in the article by “Flickr”