Buying a new car is an exciting prospect. After all, nothing in the world beats that new car smell. But, do you have the coffers to pay for your new car? Is the budget somewhat small? If this is the case, you need to consider your options. Buying a new car doesn’t mean that you have to blow your entire savings on a new vehicle. In fact, with such a wide range of finance options available to you, you have more consumer choice than ever before.
Let’s cut through the financial jargon and help you make the right financial decision:
If you have the money in the bank, it makes perfect sense to pay for your car outright. Consider your current savings. Will you blow your entire savings on a new car? If this is the case, this may not be a savvy approach to take. You need to consider keeping some of your nest egg aside. Cash is obviously the cheapest way to fund the purchase of a new car. Think carefully about how much money you will have left at the end of it.
A loan can be sought from your bank. This is one of the best ways to seek finance for your car. After all, your bank is fully aware of how much you have in there. What is more, they know what comes in and out on a regular basis. Loans from a bank can be subject to somewhat higher rates of interest. So, do be sure to check out how much you will be paying back in the long haul and that is possible with a car loan calculator. The benefits of this are that this is an easy transaction to make. It can be done over the phone in some instances. This is great news for many with busy, work lives.
Hire Purchase and Lease
Hire purchase, or HP, is a favored way to finance a car. This is a form of investment, but the car is not technically yours until the final payment is made. You pay in instalments over a fixed term. Typically, this is done from 1 year to five years. It all depends on your personal circumstances. You may be required to put down a deposit, so ensure that you have some cash put aside. Companies such as GK Group will offer this for an attractive price. It’s, usually, very easy to arrange, and the payments are somewhat more flexible than seeking a loan from your bank. Due to the high demand for new cars, the interest rates are, often, more competitive via this finance route.
Lease has also become a firm favourite with UK lenders. Leasing a car is as the name suggests. You pay a monthly supplement for the car and decide on a specified mileage limit. Simply pay the monthly fee over the agreed term and hand the car back at the end of it. If you are the kind of person who always want a new car, this is an excellent solution. What’s more, you don’t have to worry about depreciation.