A History Of American Express

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The Ultimate Car Finance Guide

Buying a car is amongst the most expensive purchases we will ever make, next to buying a house. With the average family car costing at least £18,000 and often much more, it makes sense to consider your finance options carefully before buying. Choosing the wrong finance package can cost you literally thousands of pounds in interest. 


Cash


Paying by cash is the oldest way of paying for your car and by far the cheapest. Unfortunately, most of us are rarely in a position to pay upfront for our vehicles, especially if we are buying a brand new model. If you are, though, it is worth remembering that most dealers will make money from the finance packages they offer their customers. They may offer you a lower price if they think you plan to pay for your car through hire or lease purchase or one of their Personal Contract Plans. You may wish to keep the fact that you intend to pay by cash under your hat until the price has been agreed. 

If you are concerned about using your savings to buy your car, consider that as interest rates on savings accounts are low at the moment, it is probably worth using your savings rather than paying higher interest rates on a loan. 


Credit card


If you are paying cash for your vehicle, you may want to use your credit card and clear the balance at the end of the first month so that you do not pay any interest. The advantage of this method is that you will be covered under Section 75 of the Consumer Credit Act, and so your money will be safe should the car dealership stop trading. Of course, if you have a cash back card or one which accredits points for purchases, so much the better. If you cannot pay back the balance on your card within one month, then look at other ways of financing your car. The average APR on credit cards is 15 percent or thereabouts, whereas personal loans or hire purchase schemes are usually considerably cheaper. Paying for your car with a credit card could add thousands to your bill if you do not clear it promptly. 


Hire purchase


After paying by cash, hire purchase is the simplest way to buy a car. It is easy to arrange and offered at most car dealerships. With hire purchase you pay a relatively low deposit, often ten percent and pay the rest in equal monthly instalments, usually over a period of three to four years. Many people choose to part-exchange their old cars to cover the deposit. During the term of the agreement, you are responsible for insuring and looking after the car and will not actually own it until the full price has been repaid. You may pay the outstanding balance early if you wish and will need to contact the finance company directly. Whilst there will be administration charges, you will still pay less in terms of interest. A further advantage of taking out a hire purchase agreement is that, as with credit card purchases, you will be covered by the Consumer Credit Act. Hire purchase deals on new cars are often very competitive. Some dealerships have even been known to offer 0 percent interest deals occasionally. If you are after a used car, however, you might be better off considering a personal loan. 


Personal Contract Plans (PCPs)


PCPs are available on new cars and are favoured by those who like to trade in their vehicles for a newer model every three years or so. Monthly payments are lower than with hire purchase because a substantial sum is deferred to the end of the payment period. This sum will be equivalent to the value of the car at the end of the loan period and is known as the Guaranteed Future Value or GFV. The deposit required is usually small, but you will have to agree an annual mileage. If you exceed this in any year, expect to pay 10 pence per mile when you reach the end of the loan period. Once you have finished paying the monthly instalments, you have three choices: either hand the car back to the dealer, pay the deferred sum in total or trade in the car for another model and start all over again. The advantage of this last choice is that you get to have another brand new car and save money on service charges and more than likely on repair bills as new cars are less likely to develop faults. 


Lease Purchase


Another option when deciding how to finance your new car is to opt for lease purchase. This is very similar to a Personal Contract Plan, but crucially, at the end of the loan period, you must repay the deferred payment in full. You do not have the option of trading in for another new car or handing back the keys to the dealer and walking away. As with PCPs the monthly payments will be lower than if you get the car on hire purchase, but taking into account the final deferred sum, hire purchase agreements usually work out cheaper than either PCPs or lease purchases.
Thank you to Louis Rix, Director & Co-founder at Car finance247.co.uk for contributing this informative guide.

What next? The Spirit of America

The Spirit of America

American Express is the greatest single factor in stimulating American travel abroad. By its promotional advertising and sales in the United States, the comfort and convenience afforded tourists by its skilful planning of trips to Europe, and the services offered them by its 94 offices and sub-offices on that continent, it first produces the will to travel and then provides the facilities for the enjoyment of the trip. This encouragement of American tourism is one more important service which it renders both to America and to other friendly nations.

In the history of American business it has played a role that far transcends any mere moving of people and goods around in the world, or even the aid and comfort it has given to so many Travellers. That role is unofficial American ambassador of good will to the whole world . see: The Spirit of America


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