How does car finance work?

inmypocketnottheirs

tell_it_how_it_is wrote: »

A prime example above of how to throw away absolutely s**tloads of money on a car. Be careful with the route you choose.

I would do exactly the same on the basis this is a company purchase.

CKhalvashi

tell_it_how_it_is wrote: »

A prime example above of how to throw away absolutely s**tloads of money on a car. Be careful with the route you choose.

It’s a company car, I do about 800mi a week for work, it’s also used as a family car and will have just shy of 200k miles on it when it goes back to Jaguar. (My ’07’ plate S-Max had 198k last August and OH is having my ’61’ S-Max for business reasons). I also included a Ford Focus for comparison.

I’ve used the above as an example of how two finance methods work, as I had the paperwork for that particular model in front of me. There’s no need for many people to have a car like this, but a business example is that is significantly reduces our tax bills.

CK

tell_it_how_it_is

My comment was not made with a company in mind, as that is completely irrelevant to the OP's situation. However, even with that extreme example, £11k is being "chucked away" on the purchasing aspect, regardless of whether it's being funded via a business or individual.

Yet, as I say, I feel it is a good example to the OP to be careful what path to choose, as he could end up spending £15k on a £10k car which could be worth £3k when paid up.

BJV

When you are buying a car esp a new one 9 times out of ten the manufacture will have some sort of special deal on from low rate to 0%. So check first.

The advantage of buying on hire purchase ( providing you are not buying it for a business and it is under £25,000 ) is that you have early termination rights. This means that no matter what your car is worth as soon as you have paid 50% you can simply hand the car back. There will be terms and conditions such as servicing, fair wear and tear etc. But your financial liability stops and the car goes back to the finance house. If you are thinking of a used car remember that the rate you are quoted may change with the age of the car.

The advantage of buying bank / personal loan is that if the manufacture does not have some form of subsidized finance rates you will find cheaper. Barclay's auto loan was always good but there are loads of others.

Depending upon the age of the car you may also want to consider a form of personal contract plan. PCP. Again you need to be careful and these are usually only very good if you are buying a new car and the manufacturer has a subsidized low rate.

When it comes to deposit it can help but it is not a massive factor instead your credit history is far more important, as you said you have two settled loans so this will help as it will show that you have a history of making payments regularly.

Don't want to say why but I know a lot of people in the motor trade and they with out exception tell me that used cars are suffering and new car sales while being better are still down. Because of this manufacturers are really pushing new car sales ( after all that is all they care about - market share new reg's etc ) So as this means that if it is a one or two year old car you are looking at it may be on finance it may be pennies either way to jump to a new because of the special deals that they have one.

I really hope that this helps.

KingElvis

You'll need a sensible age, a good credit history and to have been working...and by that I mean longer than a fortnight.