The best way to finance a car?

richard79_2

Hello

I am considering buying a new for around £5000. Unfortunatley i don't have the £5000 in cash and am looking at the best way of financing it. I don't want to pay interest if possible and can afford to pay £100/month. Am i searching for the holy :A grail or is there a way???

Regards

Richard79

YorkshireBoy

Option 1 - £5,000 over 5 years at 7.9% APR will cost you £101.14 per month and you'll pay a total of £6,068.57 (for a car that might only be worth £800 in 5 years time). Try the loan calculator at https://www.whatsthecost.com

Option 2 - 0% credit card(s), but unlikely to be around forever - so at some time in the future you'll have to convert the debt to a loan.

Option 3 - Ask your parents/family.

Option 4 - save up for it!

postingalwaysposting

I would go for option 4 myself

richard79_2

What would be the monthly repayments on an interest free credit card for £5000??

YorkshireBoy

richard79 wrote:

What would be the monthly repayments on an interest free credit card for £5000??

Generally between 2-3% of the outstanding balance, so £100-150.

However, if you can't shift the balance to another card at the end of the introductory period, the interest rate will jump to 15.9% - or higher.

polarbearit

I'd try a 0% card for a little while then use something like the nationwide loan (6.7% on any amount, which hopefully would be £4400 after 6 months of £100/ month minimum payments), then you could pay back £104.75/month for 4 years, which seems ok! Of course the longer you can find 0% cards the less you'll pay in interest, though on a relatively small amount - the total interest payed on 6.7% rate for £4400 over 4 years would be £628.10 if that helps put it in perspective.

That said I always went for option 4 myself with cars as they tend to depreciate pretty rapidly I'd probably resent paying interest payments on something over 4 years after I'd bought it!!!

Peter-Pan_5

They may charge you 2%+ to buy using a credit card.