Kate Moss may have just bought herself a vintage Rolls-Royce and 50 Cent may have recently spend hundreds of thousands of dollars on his chrome Lamborghini, but you don’t have to spend a fortune to buy the car of your dreams.
In fact, with the new ’57 number plates on the market, there has been a rush of people looking to buy the newest cars on the road. It may not look like a Rolls-Royce, but a Mondeo with a ’57 number plate might as well be…or so the thinking goes.
It’s easy to forget about finance in the rush to buy a new car. But if you are planning to buy one then MoneyExpert is here to help and make sure that you think about how to pay before you end up paying over the odds.
Right man for the job?
Your car dealer will probably offer you a finance deal if you buy through them. But be warned. It may look simple and will probably be the easy option when you’re so close to getting your hands on the keys to that brand new Punto, but finance deals are usually best avoided because the interest rates are so high.
It makes sense to shop around for your finance if you’re not paying cash. Often you might want to consider raising funds through borrowing money before you even set foot in a dealership, so that you’ve got the cash to pay for your car before you walk through the door.
The road to a personal loan
Personal loans can be good value – some deals are as low as 6.3 per cent which is generally better than the rates offered by dealers. If you were to pay 6.3 per cent on a £5,000 loan over three years, your monthly repayments would be £152.
But be warned: while you might like the idea of following in 50 Cent’s footsteps and buying a Lamborghini Murcielago, you should only borrow for what you can afford.
Personal loans are also flexible. You could potentially borrow anything from £500 to £25,000 and pay it back over six months or as long as 10 years.
To work out what you can borrow and to compare rates, click here to use MoneyExpert’s personal loans calculator to find out what your monthly repayments will be.
Popular Personal Loans
|Provider||Typical APR (fixed)|
|Yourpersonalloan (Homeowners only)||6.3%|
|Alliance and Leicester||6.4%|
Don’t waste time chasing loans you won’t get
If you have a bad credit history, then your chances of securing a loan at a low rate will be reduced. By clicking on the correct credit profile on MoneyExpert.com, you can find the lenders most likely to offer you a loan and will have a good idea of what is on offer to you.
Applying blind can mean you get rejected and then offered a much higher rate. Getting rejected by too many lenders will reduce your chances of being offered a loan elsewhere as they go on your credit record. Lenders look at a lot of rejections and think you’re a bad risk or are desperate.
If you’re a homeowner and you perhaps don’t have the best credit rating, one option that might still be cheaper than the finance deal at the garage is a homeowner loan. Often called a secured loan, these deals can be very competitive but require you to offer up your home as a guarantee against the loan.
Popular Homeowner Loans
Click through to MoneyExpert for money saving tips