5 tips to get the best car finance deal

car-financingWhile there’s nothing quite like driving a new car off the forecourt, first you need to get up to speed on your finance options, writes Geraldine Herbert

1)    Haggle
Don’t be afraid to haggle before making any car purchase and agreeing on a finance deal.  Obviously the more money you are spending on the car the greater the scope for manoeuvring but regardless of the price it is always worth trying to negotiate. If you can’t secure a discount then don’t under estimate the value of some optional extras instead

2)    Know your finance options
Finance has never been cheaper but to get the best deal do shop around. There are a range of options, including personal loans, hire purchase (HP) and personal contract purchase (PCP). Loans are offered by banks, building societies and credit card organisations so compare interest rates, terms and conditions.  With HP you repay, by instalments, the total cost of the car, plus interest. At the end of the contract the car is yours. In contrast, a PCP has lower monthly repayments because you are not paying off the full value of the car. At the end of the contract you have the option of returning the keys, buying the car outright or negotiating another PCP.

3)    Take the long view
When it comes to buying always negotiate the total cost rather than a monthly repayment. Often monthly or weekly repayments can conceal an expensive deal. Also you’ll need to factor in running costs, insurance cover, warranties and breakdown cover – so don’t overstretch yourself and ask the dealer about any hidden fees or costs.

4)    Do the maths
Compare loans and finance by APR – this essentially is the real cost of borrowing money because it includes interest and charges. The lower the APR, the better the finance deal. Remember a longer repayment period reduces the monthly payment, but it will also drive up your total cost negotiate for the highest monthly payment you can comfortably afford as  higher monthly payment will get you out of debt faster.

5)    Know when to buy
Sometimes  getting a good deal simply depends on the what time of the year you are buying,  Convertibles tend to be more expensive during the summer months but it’s a great time to get a bargain 4 x4.
The end of the year is the very best time to secure a good deal on a new car, as this period just before the new registration plates is also the quietest time in dealerships.

 Geraldine Herbert

16th August 2022

Author: Geraldine Herbert

Motoring Editor and Columnist for the Sunday Independent and editor of wheelsforwomen. Geraldine is also a regular contributor to Good Housekeeping (UK) and to RTÉ Radio One, Newstalk, TodayFM and BBC Radio. You can follow Geraldine on Twitter at @GerHerbert1

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