With the new vehicle registration number in September, many of us may be thinking about purchasing a new car. For most people cash purchase is not an option and so we look at the car finance options available to us.
It is worth looking further than what's on offer at dealers and car supermarkets. Although the convenience is tempting, interest rates can be high. There are a variety of ways to finance a car, each with its own benefits and drawbacks.
With an unsecured personal loan a lump sum is loaned in return for your agreement to make regular repayments. Specific car loans come with special incentives such as free breakdown cover, although with these loans the rates can be a little higher.
Deferred car purchase loans allow you to defer paying for a percentage of the car's price (usually 30%-60%) until the loan expires, so monthly repayments are less. Interest and capital is paid for the life of the loan and the outstanding balance is settled when it finishes, normally out of the residual value of the car.
With Base Rate as low as it is at the moment, unsecured personal loans are very competitive. However, it is still worthwhile shopping around to find the best deal.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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