What is The Best Car Finance?

Buying a new car with personal finance is always popular; for one thing it allows consumers to get a better quality vehicle, which should save money in insurance and repairs. It will be especially popular this month as the new number plates come out and many consumers use this as an ideal opportunity to buy a new car or upgrade to a better model. However while the choosing the right car for your needs is important; safety, size and efficiency are just some issues consumers ponder while choosing a car, the way you finance your purchase is worth considering carefully. Many consumers will be tempted to take out finance at the dealership, however this can prove costly in the long run as a personal loan can often offer better value in terms of interest rates and repayment conditions.

Firstly when taking out finance at the dealership, there often is little or no chance for the consumer to compare the deal they are being offered with other deals available. When taking out a personal loan for a large purchase it’s possible to check out many different loan companies over the Internet and in the high street to find the best deal for you. Additionally, on average finance from a dealership can charge 14%, more than double what the best deals on offer from personal loan companies currently charge. For example Cahoot currently offer a personal loan at 5.8% and the Co-Operative Bank offers a loan at 6.1%. These deals aren’t isolated either; many loan companies, banks and building societies are currently offering excellent deals.

Interest charges aren’t the only thing that places a personal loan above dealership finance. Dealerships tend to offer more restrictive finance, in terms of repayment periods set by them rather than you and penalties on early repayment of the loan. By shopping around for a good personal loan deal that suits your circumstances you can get a much more flexible deal that complies with what you want, rather than what the dealership wants. At a cheaper price. A lot of the time when obtaining finance from the dealership a deposit or part-exchange is required. This is not the case with personal loans, finding a company who will finance the full amount required shouldn’t be too difficult which leaves you free to sell your car if your upgrading, or save the deposit required if this is a first car.

Ideally, as with any purchase you plan to finance with credit, it’s worth spending as much time shopping for your preferred method of finance. After all if you end up paying more for your finance on a new car then that adds to the cost of the car and negates any good deal you’ve managed to negotiate when purchasing. A personal loan is often a flexible way to fund large purchases like a new car and usually comes at a competitive rate with terms to suit you if you make sure to shop around.