XML sitemap | Think there’s something missing from ur1stcar.co.uk? contact us | © 2006 – 2012 AAA About us Here comes the rub — you want to buy a car but you don't have the money — you need a car loan or car finance. Unfortunatley in this current credit crunch there are still ways of getting the money to buy your first car but it'll be more difficult than it used to be and more expensive.
If you’re not paying cash then you’ll need to borrow the money to be able to buy ur1stcar. Here are the most common ways:
It’s worth a try! If your parents or granny have a bit put away, you might just be able to negotiate a preferential rate. You have to pay it back though … probably.
As with the credit card, the personal loan provides car buyers with direct access to cash; money that can be used to pay for a new or used car in full. Dealers are sometimes keen to push customers towards hire purchase agreements, but few salesmen would baulk at the offer of cash upfront. Having money to hand can put the buyer firmly in the driving seat when it comes to negotiating price.
Personal loans, which may be secured or unsecured, can attract good interest rates at the moment. A personal loan for £10,000 with an interest rate of around 4-6 per cent is likely to be more cost-effective than a credit card or hire purchase agreement, but rates and terms vary between lenders and applicants, so it is always sensible to use a loans calculator to work out costs before deciding on a particular type of financing.
You own the car but default on the payments and your lender will be after you, through the courts if necessary.
This is usually what a dealer will be keen for you to sign up to as they’ll make some (more) money out of it. You’ll usually have to pay a deposit but dealers often have low deposit options.
Lenders in the UK invented the hire purchase agreement, which is perhaps why it remains such a popular type of finance among car buyers in the country. Some hire purchase deals can seem confusing, but the basic concept of such an agreement is relatively simple. Hire purchase agreements work by allowing the buyer to pay for the cost of a vehicle in instalments. A typical arrangement would see the buyer pay monthly instalments until the full cost of the car plus interest is repaid, at which point the buyer can return the car to the deal or offer to purchase the vehicle in full for a nominal fee.
Terms vary between lenders and dealers, but the hire purchase agreement is not necessarily a bad option for car buyers; indeed, it can make affordable that which cannot always be paid for upfront. Important aspects to examine before agreeing to a hire purchase contract include duration of contract, amount of interest and what happens when the full price plus interest is paid in full.
The lender keeps ownership of the car, so if you default on the payments your lender may send somebody 'round to repossess their car.
Again like a loan , you pay a deposit and then repay an amount over of a period of months but the difference is that you only borrow part of the total. The part that you don’t borrow comes in at the end of the period when you have a choice to make
Plastic is used for everything these days, which is why Britons are among the most indebted in the world. Using a credit card to pay for the purchase of a car may not be a bad idea, however, as credit cards afford consumers certain benefits that cannot be obtained through traditional forms of lending.
Credit cards, for instance, facilitate the process of claiming a refund in the event of a serious problem arising. Demanding money back from dealers can be as difficult as drawing blood from a stone, but people who use a credit card to pay for a car can complain to their credit card companies if the dealer has breached the terms of a contract, such as by supplying a car that is unfit for purpose or not as described.
Credit card purchases can confer on buyers more direct benefits. Many credit card providers, especially those offering special deals to new customers, can provide interest free periods on cash purchases. If a credit card has sufficient credit available, the cost of buying a new car can be spread over 12 months or longer before interest is applied to the outstanding sum. Purchasing a car in this way also gives the buyer the opportunity to barter with the dealer; offering outright payment can attract a substantial discount.
As with any borrowing, you need to look at the Annual Percentage Rate (APR) but make sure you get the deposit, monthly payments and any final payments written down for you to compare.
Don’t be afraid to ask family or friends for advice but remember it’ll be your signature on any agreements.
XML sitemap | Think there’s something missing from ur1stcar.co.uk? contact us | © 2006 – 2012 AAA About us 
