finance or bank loan?

natasha1989

i was just wondering if car finance was a rip off. Heard lots of stories about people having a nightmare of a time paying back the interest on their car finance so would it be easier and or cheaper to get a bank loan instead? Also are there any set guidelines for car finance as in a girl im thinking a dealer will see me coming and see £ signs! Thanks in advance

Stooby2

It depends. You need to ask for the total amount payable, monthly repayments, etc, and compare. This site gives details of good value loans. When I bought my car several years ago, the finance at the time was the cheaper option. But at the moment, the shiny new motorbike I'm looking at is going to be a lot cheaper with a bank loan.

Watch out for "arrangement fees" and "administration fees" with car finance - dealers often won't mention these until the day you go to collect the car and sign the paperwork.

The best advice would be - don't rush into buying something. If you see a car you like, spend a bit of time comparing the costs, do a Google search for reviews of the make & model, see if it has any major problems. Post on here asking if anyone knows of any issues or what they think. Having good cheap finance might not help if you end up spending a fortune repairing it later.

gilbert_and_sullivan

The best advice is don't get finance, if you can't afford the car you want buy something cheaper you can afford and save up to get what you do want.

Paying interest on something devaluing by anything from £500 to £5000 per year is a sure path to fianancial troubles.

There's a reason people who lend money live in Surrey and Cheshire mansions and those who borrow money don't.

rajarr

Car finance is regulated by the FLA (finance leasing association) which ensures that the dealer fully explains the car finance with you before you agree to anything. I would recommend going to your bank and getting an offer and then seeing if the car finance company would match it, as car finance can have some options a bank loan doesn't give you. If you get a PCP agreement you will get a guaranteed future value, if the car isn't worth that much in the future and you get into negative equity you can then hand the car back whereas a bank loan doesn't offer this. There are pro's and cons from each side though so the best thing to do would be go into a dealership and have them explain all the options to you, also go to your bank and see which one fits your needs the best

steve-L

gilbert_and_sullivan wrote: »

The best advice is don't get finance, if you can't afford the car you want buy something cheaper you can afford and save up to get what you do want.

Paying interest on something devaluing by anything from £500 to £5000 per year is a sure path to fianancial troubles.

There's a reason people who lend money live in Surrey and Cheshire mansions and those who borrow money don't.

I lived in both.....???
I did have to borrow money to get my present car as I needed it for work. Prior to living in Surrey I never had to borrow money EVER other than when I lived in Chester and had a new job and had to get an overdraft to pay for the tickets and some 'work clothes'.