Top 10 Car Finance Tips

Step 1: Set your budget

Set your budget and stick to it! Make a list of what you need the car to do. For example do you have a baby? Do you need a big boot? Do you have a large family or is it just for you? Do you want Diesel, Petrol or Gas etc.

Step 2: Research

Look on the internet for the various advice guides that tell you the recommended price of the car you are looking for. you can also find this sort of information in magazines.

Make sure you keep an eye out for manufacturers’ recalls, and make a note of when the cam belt needs changing as this is an expensive repair that must be done when the manufacturer recommends.

If there is a problem with the cam belt it could inflict massive damage to your engine. Are the manufacturers still making the model you want? If they aren't, it could mean spare parts are hard to find and expensive.

Step 3: Talk to friends

Talk to other car owners you see in the street, tell them you’re thinking of buy a car like theirs and ask about fuel consumption and reliability.

Step 4: Compare prices

Try not to get a car that has been driven over over 100,000 miles as they will need a little more attention and maintenance than a more modern car.

Get a local paper and see what is on offer, you will usually find that a Friday is a good time to look for used car prices. You will want to have a drive to local garages and dealers within a reasonable distance of where you live.

Step 5: Arranging a car loan or car finance

Check out our top 10 car finance sites or try our personal loans site to get the best loan rates you can.

You can also talk to one of our independent financial advisers on 0845 108 0505 or fill in the quick enquiry form.

We recommend you look at 2-3 different places to get the best deal, but do not apply for 10 loans as it will damage your credit rating. If you would like to find out more about your credit rating then click here. Alternatively check our credit scoring advice section on our Mortgages sister site.

Remember to always stick to your budget, and make sure you can afford the payments.

Step 6: The test drive

Make sure you test drive the car for at least 20 minutes, so you can be sure you are comfortable with it.

Take it on to a motorway or dual carriage way so you can open up fully. See how much it smokes when you use the throttle, all cars will smoke a little bit but it should not smoke after 2-3 seconds of going up through the gears, but if you get to 5th gear and it’s still smoking then you

Before the car is moved for the test drive open the bonnet and check the engine is cold, always test drive the car from cold!

If when the car is first started it takes 2-3 turns of the key to start it could need a service and or parts changing. When you sit in it make you test all the buttons, electric windows and radio.

Step 8: Warranty

Always look at what the car warranty doesn’t cover, as some warranties aren’t worth the paper they are written on.

If the warranty is a good one it should clearly state what is not covered.

Always try and get a better warranty if you are buying a second hand car from a dealer. They normally offer you the bronze warranty try and get at least silver as they normally go up to platinum. But remember that even platinum will not cover every single thing on the car.

If the dealer is confident in the car he should give you a 6 month warranty.

Again most importantly ask when the cam belt is due to be changed and try to get them to include it in the service that should be done before you pick the car up.

Also make sure if something does go wrong, the faulty part is replaced and has a new warranty.

Step 9: Get everything in writing

Make sure you get everything in writing.

Any work that was promised to be done will be done i.e. paintwork, dents removed, radio code and all other agreed items.

Get the service history if you can.

Step 10: Getting the keys

Most modern cars have central locking which uses an electronic key they can cost hundreds of pounds to replace. So make sure you get two keys and keep one in a safe place.