Wed 08 March 2017
It’s never a simple decision, buying a car. There are a lot of factors involved from what model to get, what make, what engine size, what transmission and whether you want it to be red, blue or polka dot pink. There are a lot of decisions involved but possibly the biggest decision you can make when it comes to your new car is how you plan to pay for it. The options between buying outright or buying on finance are also weighed out by the considerations for insurance and running costs. After a house, a car is the most expensive and important purchase you would buy. Due to this, it’s very important to make sure you get yourself the best deal on your car finance options.
In periods where interest rates are very low, it’s likely that any savings amounts you have in the bank won’t be earning you all that much interest. If you have enough savings to cover the costs of a new car, you shouldn’t wait to use them if you’re not earning interest anyway. When you buy from local used Honda car dealers, you will always have the option to pay outright or pay in finance and this is across the board for all car purchases.
Sometimes savings aren’t a possibility to dip into for the full amount for a car, but using some savings for a sizeable deposit is a smart idea as you can finance the rest for a relatively small amount of money. Another option for financing your new or used car is a personal loan. Obviously you need to think about this one as any money you borrow will go on your credit file and will affect further borrowing in the future if you do not keep up the payments on the loan. Make sure this isn’t secured against your home though, as if you for whatever reason run into financial difficulty you could lose your home. Not worth it over a car.
You could choose to go for a HP agreement, which is a hire purchase agreement. It’s a form of buying a car on finance and is paid in monthly instalments, where payments are spread for up to a period of five years. Usually a 10% deposit is required for hire purchase agreements and this is where savings can come into play if you have them! If not, gather a 10% deposit before you go to the show room and you can be ready and waiting for buying your car. One of the only cons of a hire purchase agreement is technically you do not own the car until you have made the final payment. If you don’t keep up with the repayments, you could also lose the car and all the money you’ve paid towards it.
Ultimately, buying a car is a very personal purchase and so is the method you choose to finance it. Obviously the best thing to do is buy outright where you can, but if you can’t, there’s lots of options out there!