OWNING a car offers you the freedom and independence to go where you like when you like.
Despite this, very few of us will ever have the opportunity to pay for a vehicle with cash and so, car finance is often the feasible option. Regardless of whether you have poor credit or not, there are many finance deals available to most of us.
However, it is vital to make the right car finance decision when it comes to choosing how you will pay for your vehicle. When you walk into a showroom, you will be met with salesmen who want to assist you with purchasing that vehicle of your dreams.
Often, finance will be something that they want to sell but it is worth remembering that not all car finance deals offer good value.
Some companies will offer interest-free finance while others will offer discounts and dealership contributions.
There are also those who will hit you with high APR charges and expensive arrangement fees, not forgetting all the other hidden costs that you could find yourself facing.
So, to make sure that you get the right deal, it is worth doing your research as this could help you to save thousands.
Take a look at low APR PCP Finance Deals
When you look at PCP finance quotes, be sure to keep an eye out for the APR that comes with it.
This will give you an idea of the amount of interest you will be paying. So the rule to remember here is that the higher the figure, the more you are going to pay.
The overall costs are often hidden away in large deposits or long contracts, giving you a monthly payment that looks affordable. However, the APR charges will give you an indication of how much you are paying for spreading the cost over an agreed term.
Often, you will find 0% APR deals where you can spread the cost of the car over a deposit or through several monthly payments as well an options final payment that comes with no interest.
In contrast to this, there are those that will charge a high APR which you really will want to avoid.
One other thing to consider here is the term over which you put the finance in place. The longer the period, the more interest you are going to pay.
Think About the Deposit Contributions
In some ways, the deposit contribution could be considered to be more important than the interest that you pay.
If the saving is considerable enough then this will outweigh the interest charges.
Ultimately, this will mean that there is effectively no interest to pay while you will also save money when compared to paying outright with cash. In some cases, manufacturers will also provide a deposit contribution discount along with interest-free credit and in some rare case, you are not even required to place down a deposit.
Does a Manufacturer Deal Mean Good Value?
Many car buyers will take out finance through the manufacturer. However, going to the dealer is not guaranteed to give you the very best deals. In some cases, you can purchase a cheap car worth around £9,000 but pay an extortionate amount of interest.
This means that you could be better off purchasing a more expensive car on a 0% APR deal.
Car finance is a great way of purchasing a car, especially when you do not have the funds to purchase it outright. However, it is all too easy to get caught up in the excitement of buying a car and you end up making a wrong decision on the finance deal that you take out.
So, consider the options, do your research and make sure you get the best deal for you.