Choosing your next car is exciting. You’ll get to test-drive all the latest models and pick every last detail of the vehicle. You’ll choose the right colour and maybe upgrade the stereo. Eventually though, there comes the tricky part: paying for it all! New cars are expensive, and it’s tough to find the money to fund your next purchase. In this post, we’ll run through your options and help you choose the best route for you.
Cash – Without a doubt, this is the best way to fund your next car purchase. Saving up the money and paying for the car outright makes the most financial sense. There will be no additional fees to pay and no loans to worry about. You’ll be able to strike a cheaper deal paying up front too. There are no monthly payments, and the car is entirely yours from the second you leave the dealer. Of course, we completely understand that this isn’t always possible. No matter what your situation, we do advise saving the biggest possible deposit.
Bank loan – Many car buyers turn to their current bank as the first option. They have instant access to your finances so they’ll offer you a quote quickly. In many cases, you’ll get the best interest rates from a bank loan too. It might be just what you need to afford that luxury car you want! Most importantly, this loan won’t be held against the car itself. If you take this path, you will own the car outright once you pay for it. Just make sure you can afford the monthly repayments to the bank.
Hire Purchase – Now we’re getting to the dealership finance options. Most modern dealers offer finance plans, so you can buy with confidence. Dealership finance plans are often useful because you can negotiate the terms into the sale itself. A hire purchase involves a small deposit, followed by a period of repayments. You don’t own the car until the full balance, and the final payment, is returned.
Personal Contract Plan – The personal contract plan is similar to the hire purchase plan. The difference here is that the repayment period is shorter and the payments are lower. At the end of the term, there will be an outstanding balance. You can then hand the car back at this point and move onto something else. Or, you can pay the balance in the resale price and keep it. Speak to your dealer for more information on the hire purchase and PCP plans.
Leasing – The final option is a complete alternative to buying the car. Instead, you’ll pay a small deposit and monthly payments to lease your vehicle. It’s often easier to think of this as a long-term rental. It usually works out cheaper than buying, and at the end of the term you simply hand the car back. It’s often used in the world of company cars, and you may find it useful.
As you can see, there are plenty of options when it comes to funding your next car. Choose the one that best suits your lifestyle. In all cases, try to build the biggest deposit available and lower your interest rates. Good luck!
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