Advice, Car Finance for Everyone: Finding the Best Deal
The principals behind buying a new car are relatively straight forward. Settle on a budget, go to a car dealer and then buy a car; simple.
However, very few people are fortunate enough to be in a position to afford a car outright and therefore need to use a car credit facility to secure the funds. And because this is normally a long-term financial commitment, there are a few points worth considering; ensuring that no more is being paid than is necessary.
There are numerous ways to fund those new wheels and, as is the case when buying anything, it certainly pays to shops around by exploring all the available options. Many car dealers, for example, will offer a finance plan at the point of sale and it is in their interest to do so, as they will often receive commission on any car loan they sell. But as convenient as this may be for any prospective car buyer, the typical interest rate from a car dealership can be as much as 3% more than the cheapest personal loan. And as a car loan can take several years to repay, even a few percent can equate to thousands of pounds in the long run.
Indeed, it can often work out better to have the finances in place before heading to a car dealership. If a car salesperson thinks they can seal a deal on the spot, then they are more likely to offer a favourable deal on the car, and the overall bargaining power of the buyer will be greatly improved.
Another factor worth considering when deciding which car finance plan to choose is depreciation, as some new cars lose almost half their value in the first year and up to two thirds of the value can be lost within three years.
For this reason, some people choose a personal contract purchase (PCP) plan, which is similar to the more traditional hire-purchase agreement. This is a conditional sale agreement, whereby a set contract-term is agreed and then equal monthly payments are made for the duration. At the end of the contract period, a lump sum can be paid to finalise full ownership, or the car can be handed back to the dealer, thus partly negating the effects of the depreciation trap.
But for some people, this may be needlessly complicated when all they want is a no-frills car to get them to work every day. And this is why it may make more sense to buy a used car.
Not only is this a much cheaper way of getting on the road, but used cars are more suited to loans than new cars because a lower amount of money is borrowed, meaning it should be possible to arrange an unsecured loan, which will protect the car - and any other property - from repossession.
But regardless of what type of car or contract-term is required, the prudence of finding the best car finance quote can't be overstated, because even the smallest difference in payment terms, can add up to a substantial sum over a number of years.
Disclaimer: Matthew Pressman writes for a wide variety of commercial clients. This article is intended for information purposes only and readers should seek additional information before taking any actions based on its content.
Related Tags: car loan, car finance, used cars, car credit, depreciation trap
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Health Articles - Air Purifiers and Seniors - What you Should Know
Are you a senior concerned about your health or do you know someone who is? Respiratory troubles are - Fashion & Cosmetics Articles - Finding the Perfect Pair of Jeans
If you're a frequent wearer of jeans, you're probably all too aware of just how much of a differen - Home Improvement Articles - More Facts about Stairlift Features
If you have been searching for more information about the basic features of stairlifts but didn't kn - Consumer Articles - World Roofing to 2014
World Roofing to 2014 report ( http://www.bharatbook.com/detail.asp?id=144994&rt=World-Roofing-to-20 - Consumer Articles - Ethnic Hair, Beauty and Cosmetics Products in the US
Ethnic Hair, Beauty and Cosmetics Products in the U.S. report ( http://www.bharatbook.com/detail.asp - Consumer Articles - Subliminal Persuasion Techniques Used on You
Have you ever wondered whether a salesman is trying to use subliminal persuasion techniques on you? - Finance & Investment Articles - Lessons From Behavioral Economics
The filed of behavioral economics repeatedly shows that we are not as rational as we think when maki - Electronics Articles - Various Headphones Types to Choose
These days, headphones have been becoming audio equipment that many people need. This device will he - Electronics Articles - The Superiority of Wireless Sennheiser Headphones
Sennheiser is a famous headphone manufacturer that has been gaining a well reputation in the audio m - Online Shopping Articles - Womens Glasses: Be the talk of the town!
Don't you want to add elegance and panache to your personality? Well, now you can do it with style w
Most viewed articles in this category:
- Ford Focus Recalls
As I write this, it seems that the biggest concern the Ford Motor company has is not Ford - What is Ethical Clothing?
Garment workers throughout the globe are traditionally paid the minimum wage and work long hours - Is Big Brother A Good Thing?
Big Brother is watching - and it could be a good thing. Closed Circuit Television (CCTV) is bei - A look at the ways to pull yourself out of holiday debt
With the holiday season over, many people now turn their attention towards the problem of paying f - The 2 Types Of Hybrid Cars
Many automobile companies have spend millions of dollars each year in research and development of mo - Top Digital Camera Accessory this Holiday Season - a Digital Picture Frame
Don't you love advances in technology? Around the holidays, this is when I typically put on my tech - Let Superbreak help you with your Christmas shopping
As Christmas approaches, Superbreak, the UK's online holiday specialist for short breaks, has just a - Five Lies You Are Being Told
We hear lies all the time. Of course we know that when a politician says "no new taxes," he is lying - Consumers need protection from Payment Protection Insurance
Consumers and consumer protection organisations are increasingly putting pressure on financial pro - Break for a holiday without breaking your bank
Holidays give us something to look forward to: fun, relaxation and exciting new experiences. But t