Car finance: time to do your homework

It is very easy to get railroaded into taking on the dealership’s finance package when you go to the showroom to buy a beautiful shiny new car. You want the car and you want to take it home with you now, but do you want to end up paying more than necessary?

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By spending a few hours doing research in advance, you can save yourself hundreds of pounds. Here are a few points to consider.

Are you going to pay in cash or use credit?

If you can sell your old car privately and go to a dealership with the cash ready to pay, you are in a much stronger bargaining position. You can walk away from the dealer if you don’t like its offer and you may be able to haggle a discount. It is much more difficult to stand your ground when you need the dealership’s finance, and the dealer knows it!

If you do need credit, however, look around for the best deals in advance before the salesman can start using the hard-sell psychology on you. Perhaps your bank or building society can offer a lower rate of interest. Ring around the dealerships to see which is offering the best deals before you visit.

Sites such as Money Saving Expert have a useful checklist of things to think about when considering finance for a new car.

Read the small print and don’t get railroaded

If you decide to go down the route of the dealership finance package, check the small print. If the initial deposit and monthly repayments are low, how much interest will you pay overall? Will you face a final lump sum balloon payment to pay off the remainder after the agreed repayment period? The last thing you want an unexpected bill when you may not be in a position to pay it.

It is much easier to obtain finance if you have a good credit history, of course, but there are companies that can provide assistance for car finance bad credit in Portsmouth and across the country.

The best advice when buying a new car is to take the emotion out of it, be objective, do your homework, and get the best deal for you. Don’t line the dealer’s pocket.