Buying a new or used car is always an expensive thing to do, and unless you're one of the few drivers who can still afford to pay cash, how you're going to pay for your new car is going to be a big deal.
So, what should you do?
You can basically look at the dealer's own financing plans (the word "plans" is usually the key word here), get a car loan from a loan company or bank, or remortgage.
Car dealer finance
There are a lot of different kinds of financing for car dealerships. But most of the time, they are the most expensive way to pay for a new motor. This is because car dealers act as middlemen between you and the company that is giving you the loan. While the "money" is changing hands, the car dealer likes to keep a little bit for himself.
This will show up in the interest rate the dealership gives you, which is usually higher than what the finance company is asking.
And if you see a deal with 0% financing, it will look good to everyone, even those who could pay cash, but you should think about why they are giving you such a good deal. Is it because they need to get rid of this particular car because it's not selling?
If this is true, what chance do you have of selling it in a few years when you want to buy another car?
Or is the 0% financing deal being offered because there are hidden costs that will be added to the total price so the dealership can still make a profit, which means you're paying too much for the car?
Also, keep in mind that if you don't make your monthly car loan payments, the car could be taken away, leaving you stranded.
Before you sign up for a 0% financing deal, do a lot of research. Everything in life has a price, even if it is hard to see.
Personal loans
If you get a personal loan before you go into a showroom, you'll be in a much better position because you'll have a lot more power to negotiate. Also, it means that as soon as you sign for your new car, even if you still owe money on it, you own it in full.
It can be easy to find the cheapest personal loan to pay for a car. All you have to do is look around for the best deal. Of course, this is made easy by the internet, which gives you access to a huge number of providers and deals. You can compare terms and conditions and interest rates, and you can even apply online.
Always get a loan with a fixed rate for as little time as possible so you know exactly how much you have to pay each month and so you pay the least amount of interest.
Remortgaging
The last way to pay for a new car is to get a new mortgage. Keep in mind, though, that even if the interest rate is low (mortgage rates are usually lower than personal loan rates), the payment will be spread out over a longer period of time—up to 25 years, depending on the length of your mortgage.
So, you will have to pay back a lot of interest on it.
You should also make sure that you can afford the extra payment. If this extra payment becomes too much for you and you start to miss payments, your house, not your car, will be taken away.
