My Dummy Car

Many people want to buy a new car; there is just something about being the first owner of the big, shiny new vehicle. There are a number of benefits to actually owning a new car; there is less servicing needed and you have the seven year warranty to fall back on so your repairs are paid for by the dealer and the manufacturer.

However, new cars are expensive and you will need to find the best way to finance a car. There are a few options available to you but the question is whether these options will cover the amount that you actually need. Personal car loans are usually the best forms of financing but it is very unlikely that you will get over £10,000.

Most people will opt for hire purchasing to be able to afford a new car but there are a number of downsides to this; the main one being that you do not actually own the car until the last payment. There is a lot that can happen over the term of the hire purchase and you could find that you can no longer make the payments. When this happens, you risk losing the car back to the dealership.

Another problem is the fact that you need to afford a deposit. The dealerships will want at least 10% of the total cost for the car. This is something that you really need to think about because it can take some years to be able to save this money up. You may need to buy a used car while you are waiting to save up the amount.

However, a personal loan could help you out in this case. The benefit is that you can use the personal loan as the down payment for the car and then you can take out a hire purchase. This is a high risk because you will be owing money in a number of places. If you struggle to make the payments for the hire purchase, there are high chances that you will also struggle to make the payments for the personal loan. You will end up overstretching your budget.

Of course, buying a used car to tide you over also brings a number of downsides. The main one is that the used car could need a lot of work done on it, which could stop you from being able to save as much money as you want.

Written by online car finance specialists Carloan4u.