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Usually the cheapest way to finance the purchase of your car is usually with a personal loan. But there are other methods. This article explains.
Car Loans Drive down the cost
Author: Michael Challiner
(cheap home insurance)
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- Car Insurance. Always Put It In Writing
- When it comes to car insurance, one of life’s important rules is to put things down in black and white. It’s all too easy for mistakes to happen – as one 19 year old knows only too well.
- Car Insurance. Always Put It In Writing
- When it comes to car insurance, one of life’s important rules is to put things down in black and white. It’s all too easy for mistakes to happen – as one 19 year old knows only too well.
- Car Insurance. Premiums driven down by the Internet.
- The Internet is having a big effect on the price of car insurance. But it still pays to shop around.
But will their painstaking research extend to sourcing the cheapest finance package? Probably not. Whilst around 50% of new cars bought privately are purchased on finance, nearly 20% sign ( best mortgages ) up in the showroom for the finance deal offered by the manufacturer. Unfortunately that could turn out to be a costly decision. With typical manufacturers finance costing 13.7% per year over a 3 year and including a 10% deposit, they could be throwing some £1,800 down the drain. (car insurance quotes)
Take someone buying a new Renault Megane Sport Saloon Privilege 1.6 and lets assume that it costs £16,000 on the road. Including 3 years interest that means the full cost will be £17,384. ( mortgages ) However, there is a much cheaper option. With a good credit history you could get a personal loan at only 5.5% and end up paying just £15,631 – thats a full saving of £1,753. This goes to prove the old adage that it pays to shop around. Rushing to accept the dealers finance package can hit your pocket hard – its effectively giving back the discount we hope you negotiated!
OK, I can hear talking about the special finance offers that manufacturers are forever advertising. Yes, there are some really good deals - but always look closely. Some deals only relate to specific models with a set specification, often the cars that the manufacturers are having trouble shifting. A beware some deals have a sting in their tail. Take Volkswagens current offer on the Polo E2. Their deal is advertised at 5.8% with a monthly repayment of £99 over 35 months – ( remortgages ) sounds a great deal but look more closely and youll find theres a final balloon payment of £3,750 or alternatively you can trade in your E2 for another Volkswagen. (mortgage quotes)
The car manufacturers use these deals to promote brand loyalty and encourage another purchase in 3 years time. They know that most cars
The traditional way to pay for your car is through hire purchase. With HP you pay a deposit, usually of at least 10%, or trade in your existing car for at least the same value, and then use HP for the balance of the price. The loan is then effectively secured on your car. So in practice, your car still belongs to the HP company until you have made your last monthly payment.
Then if you want to sell your car before youve completed the HP agreement, there will almost always be an early redemption penalty – often up to three months interest. The HP company will also register its financial interest in your car with HPI the finance tracking agency. This effectively means that you will be unable to sell your car until you have paid off the HP loan. (cheap mortgages)
Click here for part 2