The endless commute on public transport can become a little tricky when the family gets a little bigger or access is tricky. This means it’s time to consider a set of wheels. Few consumers have enough funds to purchase a car cash, which is why car loans are such an important financial product. To find the best loan out there, consumers need to weigh up their personal situation first. The Santander UK Car Loans provide consumers with the needed finance, but are there options? This review delves deeper to discover whether this range is sufficient to cover all needs.
Car finance that offers a few more choices than normal is available from Standard Bank.
About Santander UK
It’s easy to assume that a bank which enjoys such a massive UK customer base was founded in the UK. But this bank has Spanish ties and was founded in the mid-1800’s in Santander, Spain. Santander is still the base of operations for the Santander Group, which is considered one of the largest in the world. For a bank that has such a formidable presence in the UK, it’s hard to come to terms with the fact that first branch was only established in London in the mid-1900’s.
The Difference Between the Various Car Loan Types
Taking out a car loan is one of the most exciting things for first-timers. This is especially true if the loan happens to be for their first vehicle. But the loan type is not always the same. It’s important to know the difference between the various contracts for the best results.
These loans are often provided to clients under the personal loan bracket and work the very same way a personal loan does. Furthermore, car loans are not secured against the car customers buy. There are also other perks to this type of loan that will give car owners a bit more freedom. The ownership of the car is immediately the client’s, not only at the end of the loan period.
This is an agreement where the bank retains ownership of the car during the finance period. There are also two different options customers can choose from.
- Hire Purchase – Customers benefit from lower installments, however, need to pay a lump sum at the end of the finance period if they wish to take over ownership of the car. This is a good option for those who need to change their car every few years due to mileage.
- Installment Agreement – With this agreement, the customer owns the vehicle at the end of the period. This is the ideal option for those who wish to keep their car for longer than the finance period.
Other types of finance that are often classified within the vehicle finance category, include finance for the different vehicle types. This includes specialized finance for RVs and motorhomes, trailers, boats, jet-skis, motorcycles and scooters, and more. There is also the bigger vehicles to consider such as trucks and vans, which tend to fall within one of the business finance categories. In rare instances, the vehicle finance platform is also used to finance equipment such as machinery, tools, and appliances within a business setup.
Santander UK Car Loans Product Offerings
Car Purchase Loan
This loan type is not the typical finance route and offers customers far more freedom than with traditional finance options. Furthermore, this type of loan provides customers with a cost effective and safe finance option.
- These loan types are not secured against the cars customers buy.
- There is no limit on the miles customers do in their car. With some finance options, customers may face penalties for exceeding the mileage.
- Furthermore, there is no upfront payment required. The first payment is only due 20 days after the loan is agreed.
- Customers also don’t have to worry about admin fees.
- Due to the flexibility of the loan, the loan conditions are pretty strict. This means customers need to meet certain requirements before they may apply for the finance. It also means customers need to be over the age of 21 to apply.
- The loan application can take place online and customers will have feedback in a short period of time.
- The loan amount determines the APR. Also, those who are part of the 123 Word and Santander Select group enjoy further reductions on loan amounts between £15,001 and £20,000.
- Customers enjoy the benefit of fixed repayments for the life of their loan.
- The loan repayment period is between one and five years.
- Also, customers have the option to overpay their loan at no extra cost.
- Finally, the loan type allows customers to borrow more should they need to.
A recent review on Santander UK's insurance range left us quite pleased.
Important Factors To Consider When Purchasing a Car Through a Car Loan
It may seem like a wonderful idea to take out a car loan to finance the purchase of a vehicle. This is an ideal option for those who prefer simple finance and don’t necessarily want to get lumbered with tedious terms and conditions. But there are still a few important points to consider.
The Security Aspect Does Not Renege Responsibility
Customers are still required to repay their loan although the car does not stand as security. Those who don’t continue with their payments will experience a negative impact on their credit rating. They may also be handed over, which could result in legal action.
Discuss This Option With A Tax Consultant First
There are certain tax write-offs with car finance which may not be applicable to this type of loan. The best is to discuss this finance route with a tax specialist to ensure those benefits still apply. If not, it may require customers to shop around for a hire purchase or installment sale.
No Deposit Is Great, But…
This loan type does not require customers to pay a deposit, which is ideal for those who don’t have the lump sum available. However, it does mean customers are forced to pay this over a period of time which could turn out more expensive in the long term.
What We Like About the Santander UK Car Loans
This is a good product for those who don’t like intricate products. It works the same way a personal loan does and offers customers easier access to finance. What we also like about this loan type is that there is not much to remember, apart from paying the installment on time every month.
Customers own the car from the minute they drive it off the showroom floor, which gives them far more freedom than with traditional finance. They also know exactly what the repayment is every month irrespective of market conditions. This helps them to budget a little better. What is even more exciting, is the fact that customers can settle the vehicle at any time without worrying about early settlement charges.
Finally, there is no initial payment or deposit, which allows customers to hang on to their savings for other needs. It also provides them with more cash flow to allow them to do the things they want, such as enjoy long trips with their new wheels.
What We Don’t Like About Santander UK Car Loans
Although this is a simple enough product that allows customers a lot of flexibility, there are still a few restrictions due to the lack of choice. By only offering the personal loan-type car loan, customers will have to shop around at other institutions to get a different type of finance product. This is especially true for those who are required to change their vehicles regularly.
Furthermore, the fact that the loan type does not have the car itself as security for the loan, may cause more clients to default on the loan.
A Santander UK product range that did quite well in its review was current accounts.
Critical Reviews Rating Santander UK Car Loans – 6 of 10
This is not the ideal loan type for everyone and there are few customers who may need to seek assistance from other institutions for more options. Also, the loan type does require a deposit which means customers may pay off longer than required with other loans. The risk is also on the bank, as the car is not used to secure the loan. This could mean more expensive pricing in terms of APR.
That being said, there are a few redeeming qualities of the car loan. Firstly, the fact that the car is not a security item for the loan may cause customers to sleep a little easier at night. It does also mean that the customers who are approved for these loans are properly vetted before final sign-off. The loan type may also not require a deposit, but customers are free to pay additional amounts into the loan at any time. They may also settle the loan without penalties.
With this in mind, the bank cannot enjoy that coveted perfect score. But that doesn’t mean the product they do have on offer will suffer. The product carries enough weight to see that the bank scores a satisfactory 6 of 10.
Another product that we were not too keen on, was the Santander UK credit card range.