Thinking about how you plan to finance your new car before hand can save you hundreds of pounds. The end result will still be you driving a new car but the same cannot be said about finance options.
Whether you borrow the funds from a bank or building society or borrow the money from family or the dealership from which you purchase the car can effect how soon the car is paid off by a matter of months, hundreds of pounds and in extreme case, may add as much as £1000 to the cost of your motoring experience.
By borrowing from you bank, you will be able to raise all the funds from a single source which spares you the potential piece meal hassle of running around to multiple sources to raise the funds.
Interestingly, a recent study discovered that there is a huge gap in the age difference between people financing loans through the dealership and through banks loans. Younger customers greatly favour the better deals provided by the latter while older customers tend to fool for the dealership loans trap.
We compared a number of examples from well known high street banks and found that Alliance & Leicester currently offers the most competitive car loans at 6.9% APR Typical for personal loans between £7,500 and £20,000 (as of 20/09.2007). Applying Online is also simple and takes 10 minutes and you could have a decision within the hour so can be as quick as using the dealership. However, unlike the car dealership loan, such personal loans are usually a simple interest loan with no hidden charges.
With loans rates changing as dynamically as they do these days, it's always worth visiting a comparison engine such as Beatthatquote.com in order to compare loans for the best current rates.
Car Loans Compared*
New customers taking £7,500 over 60 months
|
APR Typical |
Monthly Cost |
Total Payable |
Savings |
Alliance & Leicester |
6.9% |
£147.55 |
£8,853.00 |
- |
Lloyds TSB |
7.4% |
£149.23 |
£8,953.80 |
£100.80 |
Abbey |
7.9% |
£150.74 |
£9,044.40 |
£191.40 |
Egg |
9.9% |
£157.57 |
£9,454.20 |
£601.20 |
Black Horse |
11.9% |
£164.57 |
£9,874.20 |
£1,021.20 |
Source of competitor data: Moneyfacts.co.uk - the money search engine 23.07.07
With loans rates changing as dynamically as they do these days, it's always worth visiting a comparison engine such as Beatthatquote.com in order to compare loans for the best current rates.
If you are able to finance a new car by borrowing from a family member or friend, this is worth considering. So long as you stay true to your word with regards to repayments, this should work out to be a good arrangement with extremely competitive interest rates or interest free, not to mention easy, quick and very flexible terms at times and a far more personalised service that any bank could provide.
