cheapest way to buy used

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we've got a car that's broken and eating money, so probably best scrapping it and starting again before we throw any more cash into the ever expanding hole (already spent more than the car is worth)

So, "new" car time, we've always paid cash for older cars, sub £1k, but maybe it's time to get something a little better, maybe up to 5k?
It would be nice if our new car had a towbar so we could make occasional use of our trailer tent, and we've had 2 bad renault experiences (out of 2) so maybe the french never forgave agincourt?)

Are we best getting finance from a dealer, or an independent, or maybe borrowing from the bank? We have nothing to put down as deposit but earn around £35k gross between our 2 full time jobs. Homeowners though we rent the house we live in while waiting for ours to sell (long, unpleasant story)

Foxy-Stoat_3

Cheapest way to borrow £5k is doing a zero percent balance transfer from barclays or virgin to your bank account. That will give you 0% for a year or two.

If you can pay £200 ish a month and don't spend on the cards, you will pay off the £5k without paying any interest, apart from the transfer fee.

DatabaseError

thanks, I guess that means applying for the card and hoping to get a 5k limit? currently my wife has a halifax card, and I've never had one (and I'm 45 )

Foxy-Stoat_3

Loan from the Meerkats then maybe....9% or so...the rate tends to drop to 6-7% if you borrow more. Still doesnt equal a lot of money on top.

If you go to a secondhand car supermarket and get their finance then you will be paying a lot more than 9%.

OddballJamie

Sainsburys are doing loans from about 5% on £7500+ if you have a good credit rating.

The best thing to do is find a car you like and talk it over with the garage as they get kickbacks from the finance companies so may be able to do something with the price.

Cheapest way is the credit card option mentioned earlier.

Remember that if you are planning on getting a mortgage when you move, the loan will eat into your lending power more than a credit card balance, as they work off the minimum monthly payment.

forgotmyname

A £5000 car could have the same reliablility as a £1000 car.

Be careful throwing all your eggs on one basket. If a few months down the line your car needs an expensive repair can you afford it?

Modern diesel injectors and pumps can cost £1000+ for either, Over £1000 for a clutch with a dual mass flywheel.

And aftermarket warranties probably wont cover these because they are wear and tear items.

jerrynbbt

The most important thing here is just to research. Visit the likes of Tesco finance, Sainsbury Finance and some of the comparison websites to get an idea of payments for the amount you want to borrow. You dont have to apply for anything but just arm yourself with the figures so you know whos best.

The when you visit the car dealer explain to them that you have been given some good figures already but do give them the opportunity to see if they can improve on them... there are some good rates of interest around at the moment and buying via a HP agreement or a PCP does have its benefits over a personal loan.

The main benefit of a HP or PCP agreement is that the finance company has an interest in your car so if you do have any issues with the dealer (god forbid) you do have them in your corner. Also an often neglected benefit of a hire purchase agreement is your termination rights.

Lets say you bought £10k car with a personal loan over 4 yrs and in 3 years time you really needed to change it for whatever reason, it may be unreliable, you circumstances might have changed or you just fancy a change. If the car was suddenly worth very little (People who bought Mazda RX-8's will understand me here) and lets say you could only get a buyer of it for £3500 but you owed £4500 you would have to pay £1000 just to sell the car and pay the finance off. With a hire purchase or PCP you would have either a guaranteed value at the end with PCP so if that figure was say £4500 and the car was only worth £3500 you could simply hand it back (No £1,000 outstanding finance to pay) and if you took a hire purchase agreement, provided you had paid more than 50% of the total amount payable which includes your deposit again you could simply hand the car back to the finance company and let them absorb the £1,000 negative equity.

Its a bit like looking into a crystal ball with car values that's why sometimes a little bit of protection can save you a lot more money in the long run.