Is There a Best Way To Finance a New Car?

Buying a car is not a simple decision. It can be one of the biggest purchases that you will ever make, so it isn’t something to be taken lightly. It can also be quite costly if you get it wrong, so planning and making the right choice is really key. You might want to buy a car outright or perhaps look to buy a car on finance; there are quite a few different options to look at, with some many pros and cons to each. Running costs are also something else to consider. The insurance for one kind of car might be more than you had first thought, so even things like that can play a part in what car you buy and how much it is all going to cost you. So here is a quick guide to help you buy a car and make the right choice when it comes to financing.

There is no getting away from the fact that really, the cheapest way to buy a car, is going to be by buying a car outright or part of it with cash. The reason being is that otherwise, you’ll be paying interest, whether that is for a personal loan to fund the car, or a finance agreement with the car manufacturer. If you plan to use cash to fund some or all of the purchase, then it is important to think about:


  • You may have needed to use all of your savings to buy a car, but you could then be in trouble if an emergency comes up shortly afterwards. So it can be wise to not use all of your savings at once. If you can, leave a little something in your account to be on the safe side.
  • If you don’t have enough money saved to buy the car outright and in full, then use what you can afford so that you’re able to put down a large deposit; it will make a difference to the repayments that you’ll have to make.
  • If you use money from any savings that you have, then you might be better putting some of the car on a credit card, simply so that you benefit from credit card purchase protection. Even putting a small amount of the purchase on there can mean that the credit card company has some liability with the retailer should something go wrong. And when it comes to car, especially used ones, you can never be too careful. Then simply pay it off the credit card in full when the bill comes in the following month.

There may be times when the car you have your eye on, like the new Mercedes GLA, for example, is a little out of your normal price range. Which is where a personal loan or a finance agreement can come in.

As long as you know what you are expecting to pay, and what things will cost overall, then you’re going into it informed and that can make a difference.

Post a Comment

Latest Instagrams

© Hello Wanderer UK. Design by FCD.