Shop around before choosing car finance
25 March 2003
Consumers are advised to look closely at what's on offer when buying a car from a dealer or car supermarket.
The more convenient the deal seems the higher the interest rates often are so it well worth shopping around for the best car and the best financing deal.
There are a number of ways to finance a car, each with a variety of benefits and drawbacks.
However, with the base rate as low as it currently is, unsecured personal loans can be found at very competitive rates.
The other options available are unsecured car loans and deferred car purchase loans. Buyers are reminded that it is important to identify the deal that suits your needs best.
With an unsecured personal loan a lump sum is loaned in return for your agreement to make regular repayments.
Loans can be obtained with or without 'payment protection' insurance.'
Specific car loans come with special incentives such as free or discounted car inspections, although with these loans the rates will be a little higher.
Deferred car purchase loans allow you to defer paying for a percentage of the car's price (usually 30 - 60 per cent) until the loan expires. Monthly repayments are less for this type of loan. Interest and capital is paid for the life of the loan and the outstanding balance is settled when it finishes, normally out of the residual value of the car.
Vehicle owners are reminded that changes to the car registration system mean that people needing to tax their vehicles must keep the DVLA informed as to any changes and must now present a V5 or V11 form at the Post Office.