The new car registration plate 07 is now available and though it may just be snob value, the new registration plates always spark a rush of people looking to get the newest cars on the road.
Almost half a million new cars were sold with the much sought-after ’56 number plate in October last year.
It’s easy to forget about finance in the rush to buy a new car. But if you are planning to buy an 07 car then you need to think about how to finance your purchase and secure the best motor insurance quote.
MoneyExpert.com can help with both.
Gearing up for the purchase
Many car dealers will offer you a finance deal if you buy through them. But these are usually best avoided because the interest rates are so high. It makes sense to shop around for your finance.
And it’s pretty much always the case that it is better to opt for a personal loan so you have your cash ready when you go to the dealer.
The personal loan route
Personal loans can be as cheap as 6.2 per cent which is generally better than the rates offered by dealers.
While you might like the idea of buying a Bentley or Porsche, 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, use a personal loans calculator to find out what your monthly repayments will be. And make sure you can afford them or you won’t have the car for long.
Avoiding the barriers
Do not be hoodwinked by the personal loan rates advertised by lenders because not everyone qualifies for them.
If you have a bad credit rating, then lenders will charge you a higher rate.
Try not to waste time applying to lenders unlikely to lend you the cash, either. The more knock-backs you get, the harder it becomes to get a loan.
So use the credit profiling tool on MoneyExpert.com to find the lenders most likely to offer you a loan.
Driving the costs down
Because rates are fixed on personal loans, you will know what you have to pay over the term of the loan.
And they are currently quite low. A look at MoneytExpert.com shows that rates can be just 6.2% with Moneyback Bank.
You won’t have to pay a set up fee for a personal loan, but if you pay the loan off early then your lender will probably make a charge – generally a month’s interest.
So, go for the shortest repayment term you can. The less time you have to pay off debt, the less interest you have to pay.
Down to the shops
Motor insurance premiums rise every year and currently they’re at an all-time high of around £1,000 for third party cover. The "flashiness" of your vehicle, the engine size, where you live and how much you drive a year will all affect your premiums.
So it is essential that you shop around for the best rate. Make sure you always get at least three quotes! MoneyExpert.com’s insurance service can take the hard work out of shopping around as they search over 300 car insurance schemes for you in under 4 minutes!
Buying online is a quick way of getting quotes. It can also be cheaper because many insurers offer discounts of 5% or more if you buy online.
Try to find insurers who charge lower premiums because they specialise in insuring the kind of driver you are.
Also consider opting for a higher excess – the amount you pay before the insurer picks up the bill – which reduces your bill.
Don’t puncture your finances with direct debit
Paying your motor insurance premiums by monthly direct debit is a bad idea.
Insurers usually charge extra for doing this because they have to wait longer to get their money. Drivers can be charged as much as 37% extra for paying this way.
As a tip to avoid the direct debit trap, think about using a low-interest credit card to pay for your motor insurance. You might even avoid paying any interest at all if you take out a card offering 0% interest on new purchases.
Once you have bought your car and insured it, always drive safely.
Apart from avoiding any injury, you will keep you insurance premiums down in subsequent years if you can add another year’s no claims bonus to your record!
Compare car insurance quotes today