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Car Finance Offers
Rarely is it a reality that you
save up for a new car and pay for it all in cash. A large
percentage of cars are purchased using some sort of finance.
There are also a number of financing options available to you
from leasing companies, banks and car brokers. Check out our useful
links below and shop around – visit comparison websites and banking websites
to get the best deals.
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Tip: Always look at the APR interest rate
as a comparison. If you have trouble
understanding the figures, always ask “what's the total I'll repay
including all charges?”. Then make sure you can afford the
repayments without overstretching yourself. To keep finance
costs down, borrow as little as possible, using any savings to
minimise the amount, and repay as quickly as feasible.
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Dealers
The most popular form of
finance options are usually those offered by the dealer.
Dealers do offer some good finance deal out there but generally you
can expect to pay a higher rate than if you arrange your own loan.
Use the dealer's 0% finance deal if possible, but
be aware it's possible the vehicle price will be higher if you get 0%
finance deal, so check the price without it elsewhere.
Personal Loans
A personal loan allows you to borrow a
set amount over a set period of time. Repayment is made in fixed
monthly instalments over your desired period. Personal loans are a
simple and cost effective way to borrow. Shop around as there
are lots of lenders and loans on the market, and you can save a
fortune by choosing the right one.
Credit Cards
Use a 0% credit card if
available to you. Ensure you can repay the credit card or
transfer the balance as required when the rates increase.
Ensure you do make repayments so that you are not left with a large
loan outstanding on your card while your car continues to
depreciate. It should be noted that most dealers would charge
between 1.25% and 2.5% for using a credit card but this can still
work out a cheap way to pay.
PCP (Personal Contract Plan)
Personal
Contract Plans allow you to purchase a new vehicle without having to
pay for it all. Pay a small deposit and the remainder over 12-48
months. A pre determined future value of the vehicle will be
given. At the end of the term, you can buy the vehicle or hand it
back.
Contract Hire & Lease Hire
To be eligible
for Contract Hire you need to be a business that has been trading
for 3 years. Simply choose the duration of the hire and your annual
mileage. There is usually an initial payment equivalent to 3 months
hire. At the end of the duration simply hand the vehicle back.
Personal Contract Hire
Personal Contract
Hire is similar to Contract hire above except available to private
individuals. You just need to add the VAT sum to your monthly
payments.
Useful Links
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www.comparecontracthire.com -
Compare
Contract Hire is the UK’s first contract hire price comparison
site (launched in June 2008) allowing both SME’s and consumers
the ability to quote online and deal direct with contract hire
companies. You can search by exact model, by £ rental, by CO2
and by MPG.
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www.beatthatquote.com - Beat That Quote is a major finance
comparison site, and winner of numerous awards.
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www.tescofinance.com - Offers a range of products at
competitive prices.
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www.theaa.com/loans - Loans & Credit Cards
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www.moneysupermarket.com
- Compare loans, Car leasing Plans, Loans and Credit Cards
Other Tips
- Watch for Payment Protection
Insurance. These costs are not included in the interest
rate displayed, and many cheap loans are only profitable due to their expensive
insurance.
- Many dealers make money by selling finance packages
therefore the cash price may not always be their best price.
On the other hand, a cash deal usually proceeds quickly and
hassle free with no chance of the finance falling through so if
your happy to move quickly, the dealer may be happy to do the
deal to clinch the sale.
- If interest rates are low then you will be able to get a
better car for your budget than you will if interest rates are
high.
- Whichever option you decide to go for, it is imperative that
you check any finance contract or loan agreement for all the
conditions and terms that will apply to you if you sign the
document.
- Look at exit clauses for
ending the contract early. These can often be very
expensive.
Cut Price Motoring user Feedback
Fifth Gear Manufacturers' Deals &
Offers -
www.fifthgear.five.tv
An overview of current deals on offers
being offered by UK main dealers such as free upgrade, cheap finance
offers or free insurance deals.
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