For many people, getting a car is arguably the second-biggest investment after buying a home and financial support is vital to helping them realise this dream. However, taking out a loan to buy a car can be a huge financial commitment and several factors need to be taken into consideration before signing on the dotted line.
For information on getting car finance if you have a poor credit history click here.
For further details about what type of car may be good for you, how much to borrow and where to get funding from please click here
What type of car?
Settling for the right type of car finance is just as important as getting the correct vehicle model.
And there are a range of other costs you should think about before making your purchase such as the type of fuel, how many miles it does to the gallon and how much it will cost to insure. An expensive, foreign car will cost more to insure than a standard British model.
While it is important to think in terms of the full running costs of keeping your car on the road, just as much thought should go into the car's depreciation rate, as this will determine the price tag when the time comes to sell it.
How much should you borrow?
Taking all this into account, you can then decide whether you want to buy a new or second hand car. Once you've decided on your price range, you'll know how much you need to borrow. And then you can look at the options – a straight forward loan, hire purchase, car leasing or Personal Contract Purchase (PCP).
Before taking the plunge, however, it may be worth considering the pros and cons of buying a new car or used car as this will have a direct bearing on overall costs.
Where do you get funding from?
There are several providers offering loans for vehicle purchase, but as with many other financial products, the inclusions and exclusions can vary significantly. Although car finance sold in dealerships could offer flexible deposits, interest rates and payments, it may be worth checking if better deals could be obtained from elsewhere.
High street banks and specialist lenders such as the AA and RAC could offer significantly better deals. This underscores the importance of scouring the market for the best value deal.
To help work out how much funding you need, take a look at our car finance calculator.
