Money Saving March: Car Financing Options

March sees the introduction of new car registration plates, so now is the time that many of us will be looking to buy an new car. In fact, according to the Independent, a half a million Britons will be heading off to the showrooms and buying a new motor.

The article also highlights the 3 main ways to finance your new car:

  • Hire Purchase – loans from the car dealer that are secured on your vehicle.
  • Personal Contract Purchase (PCP) – dealer lends you 75 – 80% of value, repayable over 3 years, at which point you can pay the balance, or switch to a new car.
  • Personal Loans – traditional loan through third-party lender.

As I mentioned in a previous post, Don’t Spend Too Much For Your New Car, getting finance from your car dealer is rarely a good decision. But as ever, there are exceptions, so it’s important to consider them all before agreeing to buy the car.

This tip forms part of the Money Saving March series of posts.

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