Personal Loan or Hire Purchase? Advice needed please!

bettina_2

Hello,
This is my first post and I need some advice.

I have never had a loan before, but have several credit cards.

I am in the process of getting a new, second hand car.

I have been offered Hire Purchase by the garage with a £500 discount on the car. Requiring a £7200 loan. The payments would be £1.00 per month cheaper than the Personal Loan that I have been offered by First Direct at 7.4%.

I have rate checked a Cahoot loan which would cost me £4.00 less per month, if I was offered their main rate at 5.8%.

here is little difference in the payments, but what I really want to know is whether there are any advantages or disadvantages of taking out the personal loan or the HP agreement?

Help please!

loubie_lou

In my opinion I would go with the personal loan.

If you buy the car on HP then it belongs to the garage until you pay off the agreement yet obviously if you take out the loan then the car belongs to you straight away.

LL

The_Boss

The hire purchase would be an easier loan to get since it is secured on the car. You have no guarantee of being accepted for the personal loan but will almost certainly be accepted for the HP providing you havent missed payments, CCJS etc in the past.