Low Cost Car Finance - Turning Dreams Into Reality

[Rafael Meyer]

There are many reasons why you may be considering a new car. Perhaps
your existing vehicle had just exploded for the third time this month
or it just no longer meets your needs. Maybe you're just dumping it
for the attractions of a sleeker and more eye-catching model. Whatever
the reason, there's a fair chance you'll be looking for low cost car
finance to help you buy it.
Now one of the few indisputable facts of life that nobody likes paying
for a car after they've purchased it! After a few weeks of ownership
the honeymoon period will be over and although you may still love your
new possession, it's quite likely that you'll be increasingly aware of
the cost of the repayments.
The most important thing to remember is that moaning about the
repayments after you've purchased the car isn't going to achieve much
apart from boring your friends and raising your blood pressure. The
best time to focus on these things and the finance deal is usually
before you buy rather than afterwards!
So, what can you do to keep the costs of your finance down to the
lowest levels possible?
The first thing that you may find useful is to get clear in your mind
what you mean by 'low cost car finance'. Do you mean 'low cost' in
terms of things such as lowest possible interest charges on the loan
or 'low cost' in the sense that you can afford the monthly repayments?
These are linked but in fact are not the same thing.
Many people may describe their finance repayment charges as 'too high'
but in reality they mean that they have purchased a vehicle they
cannot afford. If you're paying 500 pounds per month for a car but in
fact really can only afford 300 pounds per month then even if you had
found a lower interest rate and cheaper deal you would still not have
avoided a financial crisis. Your finance deal is not the problem!
So, there are a few common sense steps taken together that may be of
use.
1. Work out an amount that you know you could comfortably afford to
repay each month. This may sound so basic as to be patronising but in
fact people sometimes struggle with this. It may pay to avoid wild
optimism or basing your affordability figures on money that you 'hope'
to be receiving shortly "if all goes well".
2. Use your 'monthly affordable amount' to find the maximum amount you
could borrow based upon it and only THEN search for the car. Falling
in love with that Ferrari then trying to find out whether you can
afford it may lead to heartbreak and possibly encourage rash funding
decisions.
3. Try to remember that there are probably multiple sources of finance
open to you. You may find that there is a temptation to take the first
finance offer that's put on the table - often by the dealership or
salesperson. This may in fact be a good deal but you're unlikely to
know that for sure until you've shopped around.
4. You may have to recognise your own limitations! This is never an
easy thing for anyone to do but if you're not comfortable with
figures, interest rate calculations and financial negotiation then you
may not be in the best position to find the best deal for yourself.
The bottom line in that the cost of your car finance will depend to
some extent on how well you have prepared your financial position and
how much specialist advice and guidance you've taken. The best low
cost car finance deals may well be hard to find and need to be
'ferreted out' by people who understand the market. Contacting a
specialist provider of car finance options will cost you nothing, is
without obligation and may help you get the vehicle you want at a
price you can afford.