There are many reasons why people may decide to buy a car; you have just secured your first big job, but it’s difficult to get to it using public transport; you need a run-around while at university or you want to exploit your independence to the full.
Whatever the reason, the first hurdle you encounter may be financing the purchase of a car.
So, if you aren’t fortunate enough to have the cash in the bank, what sensible approaches to securing cash can you explore?
Dealership Finance
One of the first routes you can follow is to look at obtaining finance from a respected car dealership. Companies like Shelbourne Motors, offer very competitive rates on hire purchase deals and can be an easy and stress-free way of buying a car as there is no need for direct communication with a third party, such as a bank or other money lender. This means that the entire process can be completed quickly and that you get your hands on a car almost immediately.
Bank Loans and Overdrafts
Talking to your bank about a personal loan or an overdraft can be another sensible way to get the money you require in order to buy a car. Competition is stiff amongst high street banks and it may be that you can secure a loan at a relatively low APR. You may also find, however, that taking this approach is a more convoluted process, that can take some time and effort to complete.
Credit Cards
Whilst using a credit card to purchase a car is indeed another option, you can be sure that it will almost, without doubt, be a very expensive way in which to go about things. The repayment terms on credit cards are generally high and can be completely monstrous. Paying back only the minimum amount on your loan can mean that you could carry around the debt for many years and in that sense it’s really poor value for money.
A Family Affair
Although not always a viable option, borrowing the finances to purchase a car from your family is by far the best way to find the money. If it’s possible, then it may well be that you won’t be charged an interest rate at all and that your repayment schedule can be more flexible.
It is sensible to write down an informal contract, just so everybody is clear about the amounts involved, the repayments and time scales. This way there’s less likely be any family squabbles further down the line.
Taking a sensible approach to buying a car is not too difficult as long as you don’t overstretch yourself financially and avoid any risky cash pitfalls that could result in a pricey pit stop.
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