purchase a car which is best loan with low rate

Hunnie1977

a friend just passed her driving test and want get a car but not new one 
and want to know which best loan 
via car dealership or bank or building society and is this how long take the loan 

dumpster_fire2025

She's probably not better off getting a car on finance if she's just passed her test.

If she's adamant about throwing money away, the lowest APR offer over the shortest period is the least detrimental to her finances.

MEM62

Advise her to buy a car that she can afford - i.e. pay for in cash.  She will have an absolute fortune over the years by not starting the habit of having a long succession of cars on finance.  

CliveOfIndia

I have to agree with the previous poster - as a new driver, she's much better off buying an older car for cash.  With the best will in the world, there's a reasonable chance she's going to end up with at least a few minor car-park dings and scratches, so a car that she's not too worried about cosmetic looks makes a lot of sense.

Added to that, bear in mind that running a car is an expensive business.  Quite apart from the routine costs that we all incur, insurance is likely to be pretty hefty for a new driver.  So she could probably do without the added expense of repaying a loan.

If she's got her heart set on some sort of finance deal, then a personal loan is likely to be the best route (or, at least, the "least worst").  Dealer finance tends to be offered mostly on newer cars, which is probably not the best option for a new driver.

For a personal loan, you need to look at the "total amount payable" - this will be influenced by both the APR and the length of the term.  But for a car loan, you don't really want to be looking at anything longer that 5 years - ideally 3 or even 2 years max.

eschaton

Lowest interest rate will be best. 

Paying up front is the best advice. 

I paid my first older car up front as I was a student. 18 months later I bought my next car new with 35% deposit in August 94. By February 98 I was on new car 4. Cost £12200 with £6k over 2 years at 0%. 

Next car in May 1998 2 months before my first mortgage was a slight downgrade but paid up front. I’ve done that ever since. 

You just save instead of a monthly payment and receive interest instead of paying interest. 

To be fair, the first 3 new cars I bought represented good value in depreciation. I was a young driver with an early CD30 conviction so the free insurance was a big benefit. 

A loan can be good to get up the car ladder but not for the long term. 

When I bought my current car, I looked at a 4 year lease out of interest. £400pm. I bought one as new with 1039 miles at 4 months old. Depreciation for the first 4 years was £147pm. 

I could have paid near £20k in lease payments with no car at the end. Instead I paid £23k and still had a £16k asset. 

That asset allowed me to pay off my mortgage last year instead of getting a new car. 

The financial benefit of doing so will probably cover future depreciation until I can afford a new car again. 

For me, car finance should be a last resort. I’m now mortgage free and still won’t consider finance for a car. 

Buying a car is a much better feeling compared to borrowing a car. 

dinosaur66

unless she has money to burn then a toyota aygo or any group 2

 1.0 litre car with as low as mileage as poss for 1.4k or less is well good enough for any first year driver and it means the insurance will be as low  and it will be a fine learning to drive car.

i would imagine any car loan from a bank would be bank of england base rate plus 2% so 6.5% approx

car finance would be higher from a dealership

if she has a  job 1/ 2 years income as long as banks deem she can afford it then she will get it quickly

as everyone else as said / she just wants a basic no frills first car