6 Top Tips To Purchase A New Car
- 21 Apr 2020
There has always been a hefty debate as to whether or not the purchase of a new or used car is the superior option. While there can be arguments made going, either way, there is no denying how alluring the thought of buying a brand new car can be.
Therefore, if you've made up your mind to purchase one that is brand new, you will want to identify your options for paying for it.
1. Borrowing Money From Family and/or Friends
If you have someone that knows and trusts you that is willing to lend you the funds, this can be one of the cheapest options to consider. That being said, it's important to have a good contract in place and only do this if you plan on paying them back. After all, many friendships and even family relationships have been destroyed due to unpaid debts. Therefore, you should keep this in mind prior to choosing this option.
2. Use Your Savings
Using your savings is a good option because even the best ISA accounts are giving out very little incentive nowadays. Therefore, you won't necessarily be missing out on a fantastic deal. If you have savings, you might think that you could better use that money for a rainy day fund and use it on a car loan. It's important to recognize that the repayment of a loan is likely going to end up outpacing the interest you earn on the savings.
3. Putting It On A Credit Card
You could always consider putting some of the payment on a credit card. This is only a recommended option if you are able to secure an interest-free period on brand new purchases. That way, you don't end up having to pay sky-high interest on the new car purchase. This is also only going to be an option for those that are able to get a fairly significant spending limit. By the time the interest-free period comes up, you could always transfer the balance to another interest-free card or pay what is due.
4. Take Out A Personal Loan
If you are someone that is considering taking out a personal loan, you need to do research. Not only should you consider how much you want to borrow with the loan, but the duration at which you are looking to borrow, as well. Try to base the amount that you are willing to borrow depending on how much you feel you can comfortably pay off in the respective time frame.
5. Hire Purchase
This type of option typically entails paying a certain deposit amount which is usually around 10 percent. From there, you repay the balance in addition to accrued interest over the entire loan period. With this option, you won't own the car until you have made the final payment. You will also be in a position where you could quite possibly forfeit the car if you miss a payment.
6. Personal Contract Purchases
This is another option which is more suitable for those that are regularly changing their cars. For this, you would pay a deposit at around 10 percent along with low monthly installments over a specified fixed period of time. However, you will defer a significant lump sum until the final period of the contract.
Thus, at the end of the term, you will have the choice to either pay the final lump sum in full, give the car back, or sell it privately to pay off the total outstanding balance.
For this option, you will need to properly maintain the car and keep your car under the agreed-upon mileage.