What Is the Best Way to Finance Buying a Car?

Buying a car is a big decision. Not only are there a lot of car types to choose from (one day I’ll have a DB9. One day), but there several options of payment options to choose from. It can be the second most expensive thing that you’ll ever buy, second only to buying a house, so it is a big decision. Making the best choice for your situation is vital.

You might think about buying brand new or looking for one at a used car supermarket. Whatever you choose, there is a lot to consider, so here are some tips and help for when it comes to financing it.

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Here are some of your options:

Buying a Car Outright

Interest rates aren’t the best so you might be better putting your money towards car instead of having it sat in the bank. You might not have enough to buy a car completely with cash, but it could go towards a hefty chunk of a deposit, meaning you will have low monthly repayments. Just make sure you have looked at reviews and pricing before signing on the dotted line; you could read more here. It is a good idea to still have a little left over in your bank, for emergencies, though.

Buying a Car on Finance

If you don’t have the money to buy a car outright, and as said above, you want to use a little cash for a deposit, then the remainder of the car will be bought on finance. This is in basic terms, a loan from the car dealership, where you pay back a monthly amount. Buying a car on finance means that the loan is held against the car, so it isn’t yours completely until the last payment has been made.

A lot of people might be in a situation where they think they can’t afford to get a car. They might have a history of bad credit and think that the would just get declined. There is help available inĀ getting car finance if you have bad credit. Have a look online for some companies that amy be able to help you.

Getting a car on finance is quick and easy to arrange, and often, you don’t need to put down too much of a deposit (though what you put as a deposit will relate to how much your monthly payments are). You should make sure that you can afford all of the repayments before you sign anything though. Check the APR rate and work out the complete cost of borrowing once it has all been paid. If it is realistic and what you can afford, then this is a viable option.

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Personal Loan

Depending on what loan rates you are able to get for a car, it could be worth getting a personal loan to pay for it. This will depend on your circumstances and how much you can repay each month. It is worth checking out a finance option first, though, as it might be a lower interest rate than a personal loan.

This is usually quick to arrange and can even be done through your bank online. I would advise never using a pay day loans company in general, but particularly not for buying a car!

Have you any experience in buying a car one f these ways? I’d love to hear what worked for you.

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