It’s estimated that there are currently 35 million cars on the road in the UK, with over £1.2 billion spent on acquiring them every year. Yet as crowded as our roads may be, cars are ultimately a necessity for many of us – whether it’s a get-me-to-work car, a family motor or a little run-around vehicle.
The obstacle to this, of course, is getting your hands on the capital to make this necessary investment. The prices of insurance alone can be inhibiting, and, coupled with maintenance costs, can make the ‘package deal’ of buying a car seem like a distant dream.
It need not be this way though. In the increasingly agile world of consumer credit, there is one particular avenue which is fast emerging as a viable and good-value source of car finance. Quite simply, the personal loans market has been taken by storm by peer-to-peer (P2P) lending platforms, which, by virtue of matching consumers who have extra money to lend directly with those in need of a loan, are able to offer highly competitive APRs and repayment plans.
Indeed, the culling of intermediaries from the interaction (as you would associate with the likes of banks and building societies) results in a highly streamlined process. Furthermore, with both the lending and borrowing processes taking place entirely online, there are minimal overheads for these peer-to-peer lenders to contend with, thus allowing them to pass the benefit on to the consumer.
Unsurprisingly, P2P platforms have therefore become major players in the market for car loans. A borrower is typically able to take out a personal loan of between £1,000 to £25,000, thus meaning that cars of just about any variety are as accessible and attainable as they ever have been. The flexibility doesn’t end there though. Some platforms such as Lending Works offer you the opportunity to make overpayments and early repayments at no extra cost.
Perhaps the greatest pull of these platforms though is the element of convenience. An online personalised loan quote can be attained within a couple of minutes, and, if the quoted APR is to your liking, the subsequent application process is even quicker. A decision on whether the loan has been approved and the final APR is then returned to you via email within one working day, and, should you decide to accept the terms, the funds arrive in your bank account overnight.
Such an innovative concept has lifted the bar in the personal loans sector, and, more importantly, has made things simpler for the customer. No longer are unsecured loans something to be sceptical of, and instead they are increasingly being characterised by sensible repayment plans and convenience.
It all leaves you in a good position, whereby you can shop around and find the most suitable loan for you. Certainly, with the power in your hands, it is prudent to do one’s homework, and ensure that there isn’t any fine print or potential pitfalls with the provider you choose.
However, if after weighing things up you decide that a peer-to-peer loan is the route you wish to go, you can afford yourself a smile knowing that you could be driving away in your new set of wheels just 48 hours later, safe in the knowledge that you are living within your means. It’s car finance that benefits the consumer – just the way it should be.