There are almost too many finance options around today when it comes to buying a new car, or even a used one – so much so that you can spend almost as long researching these as you would your choice of car itself. As long as you match the way you pay to your current finances, you should be able to find the best deal using these considerations, no matter where you plan to buy a car, be it Plymouth, Birmingham, even in Newcastle.
Don’t rely on a dealer’s offers
While the dealer’s finance options may be pretty competitive, there’s likely to be something even better for you out there, so don’t just plump for what’s on offer at the place you’re hoping to buy from.
Use some of your savings
If you have any cash saved up, it’s always better to use a portion of this to buy a new car than using a loan or finance deal outright. You’ll save on interest and if you can pay cash outright under your own steam, you won’t be tied down to monthly payments.
Consider a loan from the bank rather than the dealer
While it may be tied in with a particular deal on a car, you may find that taking out a personal loan from your bank means cheaper payments in the long run. Something else to bear in mind is that a personal loan would not be secured against your purchase, so if you were to fall into arrears, your car wouldn’t be taken away. However, it may be tough to get a loan if your credit score is patchy.
Hire Purchase could be an option
Very similar to a personal loan: you make set monthly payments, and once you’ve completed these, the car is then yours. While only some dealers will offer personal loans, most will offer some form of HP plan. You may even be able to snap up a contribution to your deposit courtesy of frequent manufacturer deals. The downsides though are that your car could be repossessed if you get into trouble with your monthly payments, and those monthly payments would likely be more expensive than other finance methods.
Your credit card might be an option
Provided the dealer you plan to buy from accepts credit cards, you could feasibly use yours to buy your car. Plus, of course, you need a credit limit high enough to cover the cost of the car. The benefits of this are that, should anything go wrong, you’re covered by Section 75 – that is, your credit card company will step in and help you to get it rectified, even if you only used your credit card for part payment.
The down-side of this is that credit card interest rates are usually much higher than the other forms of financing we’ve discussed.
How should you pay the car dealer?
As Honest John points out on Telegraph.co.uk, paying in cash, either from savings or a personal loan, has one major benefit – it cannot be revoked after you drive away in your new car. Many dealers won’t take cheques, but you may find that a bank transfer will be acceptable.
MoneySavingExpert.com has plenty more advice on how to pay for your car.
Are you looking to buy a new car?
Speak Your Mind