Best way to get a car on finance?

ritchiej91

I'm expecting to put a deposit of £3000 - £4000 on a car at a value around the £14000 mark, I would then like to pay the rest in monthly payments. Does anyone have any suggestions on how to finance the other £10000 as I am aware there are various ways to do this.

Thank you in advance to anyone who replies with constructive suggestions :beer:

wgl2014

Assuming you are eligible.....

A bank loan is likely to be lowest APR but you may get a better deal on the price if you take out dealer finance. I have seen it suggested that if this is the case you take the dealer finance then cancel within 14 days and pay it off with a bank loan.... best of both options!

Cornucopia

It depends on whether you are looking at running the car for a few years and then disposing of it, or if you are looking to own it for the long term.

For a "few years" term, there are plenty of different options, and you can readily crank the figures to determine which is cheapest. Some of them would involve putting down less deposit than you have earmarked for your purchase. I am just about to order a new car as a Personal Lease. It has a list price of £20,745, but I will be paying c. £1500 down and £172pm to lease it over a 3 year period.

If you want to buy for the long-term (5+ years) then it is simply a question of the lowest APR on a loan that is structured with payments that are as large as you can afford.

I presume that we are talking about a brand new car, as some of the options vary depending on new vs. second hand.

ritchiej91

They are advertised " as new" so second hand but barely used.

Cornucopia

ritchiej91 wrote: »

They are advertised " as new" so second hand but barely used.

Okay. So potentially still worth comparing with purchases of brand new versions?

But OTOH, are unlikely to come with manufacturer's incentives.

Depending on the brand, you will need to be looking at a considerable reduction from new to make this worthwhile. (With cars, "barely used" is used).

MEM62

OP - Once you have a finance offer look at the total interest you will be paying against the loan. Then look at the depreciation of the car over the term of the loan (ie £14,000 minus the residual value) Add those two numbers together to see the real cost of the car. If you haven't fallen off the chair by that stage you might at least want to re-think whether it is worth it. Shiny new car syndrome can be really expensive.

ritchiej91

I have been looking at a personal loan of 10K. I am just in the process of improving my chances of getting it.

For example I have an interest free overdraft of £1500 as I am also a student as well as working full time. I have used all of the overdraft and I am using 99% of the credit available on that. So I'm going to depost 1k into it to get the credit used down.

I also have a very account with a £500 credit balance that my ex partner opened. The account has never been used but I am having that shut down today also.

motorguy

ritchiej91 wrote: »

I have been looking at a personal loan of 10K. I am just in the process of improving my chances of getting it.

For example I have an interest free overdraft of £1500 as I am also a student as well as working full time. I have used all of the overdraft and I am using 99% of the credit available on that. So I'm going to depost 1k into it to get the credit used down.

I also have a very account with a £500 credit balance that my ex partner opened. The account has never been used but I am having that shut down today also.

Sounds like you're going about it the right way. Use the online loan comparison sites to find the cheapest offers as "a bank loan" can vary greatly in cost.

Also, can i ask, whats the specific car in question?

ritchiej91

motorguy wrote: »

Sounds like you're going about it the right way. Use the online loan comparison sites to find the cheapest offers as "a bank loan" can vary greatly in cost.

Also, can i ask, whats the specific car in question?

I'm thinking either an audi A3 or mercedes A180 or A200....I was going to go with santander as I am a customer of theres...I'm hoping they will take my bank balance into consideration with the loan

Mercdriver

ritchiej91 wrote: »

I'm thinking either an audi A3 or mercedes A180 or A200....I was going to go with santander as I am a customer of theres...I'm hoping they will take my bank balance into consideration with the loan

What the until recently fully used overdraft?

Get a soft search that doesn't mark you credit history. This can give you an idea of the rates you might get. Be wary, though as my wife did this, had an indicated 3% APR from both Tesco and Hitachi - Hitachi offered 27.9%, but Tesco (after joining clubcard, Tesco say that your chances improve on joining clubcard) kept with the 3%APR. Their communication isn't great as they don't confirm the offer with an email, you generally get an offer pack after a few days and a text message when the money is paid into your account.

Many car dealers use Santander - my 0% on my Mazda which was bought at 20 months old is Santander. Most banks still fully credit check even their own customers.

Penelopa.Pitstop

ritchiej91 wrote: »

I'm thinking either an audi A3 or mercedes A180 or A200....I was going to go with santander as I am a customer of theres...I'm hoping they will take my bank balance into consideration with the loan

It's possible, you may find brand new cheaper than pre-reg from dealer. Go to carwow and configure new car and see what discount you could get.

Def. avoid finance from dealer which will be around 9-10% for used car.