Posted on: 08/05/2014
When it comes to organising a car loan, there are many routes you can go down. To help you make an informed decision, we take a look at this blog from Motor Paper, that provides some great car loan advice detailing the four main options, as well as our own haggling tips.
There are four main ways you can organise a loan for your vehicle:
Buying your new car via a hire purchase agreement allows you to drive it away after putting down a deposit and signing a contract. You will need to repay the purchase price in instalments - usually over a period of two to five years.
A Personal contract purchase works in a similar way to a leasing agreement. It usually requires a smaller deposit than a hire purchase agreement, and the monthly repayments are typically lower. However, there is a significant final fee to pay at the end of the contract if you want to take full ownership of the vehicle.
A personal loan from a mainstream bank or building society will give you full ownership of your vehicle from the moment you purchase it. This means that you are free to sell the vehicle at any time. However, unlike loans that are secured on the car, there is no statutory right to voluntarily terminate the loan agreement after half the repayments have been made.
Peer-to-peer loans provide a convenient and affordable way to secure the car you want from the dealership of your choice. Application processes employed by most peer to peer platforms are usually streamlined, so you can have your loan approved and paid out within just 72 hours.
To get the best deal on your car, it also pays to haggle. The following tips, sourced from this Sell My Car Quick blog, should help you get the most for your money:
1. Know the market: Get a good measure of value for each make and model. This will arm you with knowledge and confidence to do battle in the showroom or with a private seller.
2. Be a cash buyer. That doesn't necessarily mean handing over £10,000 in £20 notes, but having the money in a bank account able to transfer to the dealer will put you in a good negotiating position. Beware if you pay by credit card dealers are likely to charge you a payment fee of perhaps two per cent.
3. Tell the seller your maximum price and then be prepared to walk away. If they don't take it, tell them the deal will stand if they come back to you but you are looking at other cars.
4. Make sure you're fully decided on the car you want, and on your budget. Don't be persuaded into spending more than you can afford - and if you don't like the deal, walk away. Also, don't forget to budget in other outgoings such as what your car insurance is likely to be, as this will also impact how much you can afford to spend.
5. When a new model or face-lifted version of a car is launched, or is imminent, the 'old-look' model can be bought at greater discount.
6. An older more expensive model can sometimes be bought for less than a cheaper in-demand new car. For example, if you want to order the new Jaguar F-Type you'll likely be paying full list price, but you could negotiate the cost of a theoretically more expensive Jaguar XK to below this, as this model is nearing the end of its lifespan.
7. Larger discounts are often available before the introduction of new registration plates.
8. If asking for a drop in price is a daunting prospect, try getting additional extras thrown in, such as a stereo upgrade, free metallic paint and/or a full tank of fuel.
Another way to get the money together for your new car purchase is to sell your car to us. Sell your car to us for cash and you can be confident that we will dispose of it in an environmentally-friendly manner.
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