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Choosing the best car finance for your needs

Once you have decided on the most suitable type of car whether it is second hand or a brand new one from the forecourts, the next decision you have to make is how to pay for your vehicle. If buying second hand from anyone other than a dealer you will of course have to walk in with cash in your hand. If buying from a dealer or showroom then you would have the option of sorting out your own finances or taking the car loan that the dealer/showroom offers. Car finance could therefore need as much at

Once you have decided on the most suitable type of car whether it is second hand or a brand new one from the forecourts, the next decision you have to make is how to pay for your vehicle. If buying second hand from anyone other than a dealer you will of course have to walk in with cash in your hand. If buying from a dealer or showroom then you would have the option of sorting out your own finances or taking the car loan that the dealer/showroom offers. Car finance could therefore need as much attention as it did when you went looking to choose your vehicle.


If you decide to take car finance yourself then you could allow a specialist broker to look around and find the best car deals for your needs. This could be one of the best ways to get the cheapest car loan and it may save you not only a great deal of time but also money. It also means that you would have money in the bank which could put you in a bargaining position if you are buying your vehicle from the showroom and could allow you to knock something off the cost of the price asked for the car. However there are other options that you could consider.


•    When taking out a loan you would have to choose from a secured loan or unsecured. The secured loan interest rates could work out cheaper and you would usually be able to spread the cost of the loan out over a longer period. This may come in useful if you are buying a top of the range brand new model from the showroom. However you would need to bear in mind that you would have to put something up as security against the loan and could lose it if you defaulted on the loan and could not catch up on the missed payments.
•    An unsecured loan would not come with this problem but would be based on your ability to repay the borrowing and your income. That means the vehicle could be sold by you at anytime as long as you still paid off the loan.


You could consider car finance by way of hire purchase where you put a deposit down on the vehicle and then repay over a period of time. However the car would only be yours once you had paid the final instalment on the loan and you would not be able to sell the vehicle until this time.
 

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Back to May 2009

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