What to consider if you’re thinking about a car loan

If you’re thinking about buying a new or used car in 2019, there’s a lot to take into consideration if you’re hoping to get a good deal. Here are a few pointers that may help in your decision making process, including some important questions to ask yourself before shopping, and a quick checklist for anyone who’s looking for car finance.

Do you really need a new car?

A car is often the most expensive purchase a household makes during any given year, so consider wants vs needs before you get started. For example:

• Do you need your own vehicle as part of your job?
• Does your household need a car for childcare / healthcare / other practical reasons?
• Would it be cheaper to maintain or fix your current vehicle?
• How often would you use this car?
• What’s public transport like where you live?
• Be honest, are you trying to ‘keep up with the Jones’s’?

What sort of vehicle do you need?

• What’s your budget range?
• Will you be buying a new or used car, van or bike?
• How many seats do you need?
• Is your household / family likely to get bigger soon?
• Do you need any special features, such as automatic transmission?
• What are the likely ongoing costs, such as insurance, maintenance and fuel? Can you afford those?

How will you finance your purchase?

Once you’ve worked out which sort of car you want to buy it’s time to move on to payments and general affordabilty.

• Do you have an existing vehicle to sell / part exchange?
• Is there anything else you can sell to raise some cash?
• Do you have savings you could use?
• Will you need to take out a loan for some or all of it?

Searching for a car loan

• Look around the market to find the most competitive finance deals – comparison sites can save time and money
• If you have a poor credit history try a comparison site tailored for car loans for people with bad credit
• Consider affordability: make a note of the APR, the time allowed to pay back the loan, upfront fees and any extra costs that might be bundled in with the finance
• Read the small print: understand exactly how much you’re borrowing, what the monthly repayments will be, and the penalties for late payment

Full disclosure: Post created in collaboration with CarFinance Plus. All words and opinions my own.