Choices for low cost car loans.Whether you are looking for a new vehicle as your first car or whether you are looking for a new or used car because yours is on its last legs, you may have to consider finance. So what are the choices for low cost car loans?
Whether you are looking for a new vehicle as your first car or whether you are looking for a new or used car because yours is on its last legs, you may have to consider finance. So what are the choices for low cost car loans?
• Dealership hire purchase
• Personal / car loan
• Credit card
• Borrowing from family/friends
The last option of course may be possibly the cheapest way of financing your vehicle, however is not an option that is available to everyone. A credit card may be a way of financing your vehicle purchase, however generally this is only suitable if you are buying a cheap used car. Therefore, you are left with two main choices, the personal loan or the hire purchase option.
Hire purchase vs. Personal loan
If you are going to buy your vehicle in a dealership, you may choose either option. Of course, if you aim to buy your car through a private sale you have to find low cost car loans to compare so that you have the money when you go to buy. If you are looking for a loan, you may want to allow someone else to search for it on your behalf. A specialist motoring website may offer used vehicles for sale and offer you a finance deal too, which can make buying a used car and finding finance a great deal easier. Therefore, in some ways where you are going to buy your vehicle from will determine the most suitable type of car loan.
Keeping the cost of borrowing down
If you allow a specialist website to search for a loan then you may stand a better chance of getting a suitable loan at a competitive price. Websites such as this often work alongside some of the well known UK lenders offering some of the lowest interest rates. You can then take your time to compare the deals found for you for the lowest interest rate.
If you want to go with hire purchase then you may want to look around dealers to find out if they are offering a 0% interest deal. If you can repay a loan during the interest free period this may be one of the cheapest ways of financing for your purchase. However, you may want to check what interest rate the loan reverts back to after the interest free period if you want to take it over a longer period. Also check to see if there will be a penalty fee payable if you settle the loan before the end of the term of the borrowing.
If you have some money to put towards the cost of your vehicle as a deposit then of course you borrow less. The less money you have to borrow the less interest you pay so this can help go towards finding low cost car loans.
Posted by Edwin Miles on