Best Way to Finance a New Car

thaylock

idv wrote:

Hi

I am looking for the best approach to finance a new car.

I will need to borrow £11,000

Why not try bucking the trend & try saving then paying for it in cash ? Or half cash, half on finance ?

lettie

my daughter bought a car on her credit card 4,000 then TB on to capital one 3.9 for life of balance. that was 2 years ago. just sold her car for 2800 bought a new car 7000 same way she had her first car, she paid her loan in 2 years.hope this helps.

billywhizz

idv wrote:

Hi

I am looking for the best approach to finance a new car.

I will need to borrow £11,000

Do I

1.) Take out a loan with Northern Rock who are the cheapest I have found at 5.6% APR


2.) Use the M&S Car Buying Plan which works like Ford Options you pay for 4 years for example and have a lump sum to pay at the end of this term


3.) Put the £11,000 on a 0% interest credit card, then BT this over to the Texaco card which offers 3.9% APR for the life of the BT


Thanks

1) - If you can get the rate then a good cheap way of buying a car.

2) - Bear in mind that with this type of lending you pay interest on the final payment for the term of the agreement. Whenever comparing types of car finance such as this DON'T look at the APR (No really I know that's what you're conditioned to do but DON'T) Look at the total cost i.e. how much you will repaying in full - You may be surprised.

3) - No idea, again this comes down to the total cost of borrowing. You would need to repay a fixed amount each month rather than the minimum and again look at how much you will repay over the lifetime of the loan against a fixed repayment schedule personal loan. I will go and do some work to see if I can work it out but it's late on a Sunday!

Essentially the important thing is do you want to own the car?

If the answer is definitely yes then chances are a simple personal loan is best and cheapest.
If No then look at Personal Contract Hire (Which comes in very cheap but has no flexiblity) or Personal Contract Purchase (Options type plans) Which is more flexible and allows you to buy the car if you want.

Finally if you are buying a brand new car then spend a lot of time on the internet looking at what discounts you can get before you visit the dealer. You can often source vehicles cheaper over the net than the dealer will sell to you for.

Can you guess what my job is yet

idv

Thanks billywizz

Its a good tip about looking on the internet, I was reading a magazine about this over the weekend.

However I will be using a ford priveledge voucher so will be saving 25%-30% on the list price of a new car, so have not found one as cheap as what I have been quoted using the voucher!

My aim is to own the car, at present I am on options hence the reason why I have little deposit to put down on the car!!

So for that reason I am leaning toward a bank loan, however putting it on a CC is very tempting with the low interest rates.

As long as the prices the dealers have quoted me for my car (trade in) and for the new car are not based on taking their finance packages!

Debt_Free_Chick

Will the seller take a credit card as payment? Most don't unless you pay the CC surcharge.

pipk62

Hi all.
Was looking through MSE for advice on buying a car as I will need one soon, hence me landing here.

I thought I'd tell you what happened to one of my friends...

He bought a car which was one year old - he said that new cars depreciate as soon as you drive them off the forecourt, and if you look for 1-2 years old, then all the teething troubles are usually ironed out, if a car is 3 years old it was probably some kind of fleet car.

He bought the car in December - so he could get a good deal, also see below...

He saved up enough cash to buy the car, then went along and got it on finance - Now, he has the gift of the gab, and because the dealer was very keen to sell the car at a time of year when sales are low, and to get him to sign up to a finance agreement (which is beneficial to the dealer) my friend managed to get several extras including; An upgrade to the CD player (now has super-dooper bluetooth 'n' flashy lights set up), REALLY decent plush car mats and matching car seat covers, a karcher high pressure spray thingy, he even got a cuddly toy after the salesman joked about it,

He cancelled the agreement within the cooling off period, and paid the garage with cash (he did mention some kind of hassle, cant remember what though - but it was sorted out, and he still had all those little extras).

I can't remember where he bought it from, but I do know he lives in London, yet travelled 'up North' to buy this car.

Unfortunately, I haven't got his gift, so I'll be thankful of a decent car on sensible finance.