Getting a new car is exciting but it can also be expensive and beyond simple tips like opting for a second-hand model and shopping around for the best price, people are often on the lookout for frugal ways to cut the cost without having to compromise too much on the quality of the vehicle. Luckily, the market now has more options than ever for consumers, giving everyone the best possible chance to find the car that is right for them.
If you find yourself in the lucky position to have a nest egg of savings, instead of having them sit in a bank account with pitiful interest rates, you may instead want to put some of it towards investing in a new car or at least paying a substantial deposit for one, to reduce monthly payments.
When dipping into your savings however, always make sure you leave enough for emergencies, related to your car or otherwise, and before buying outright consider the running costs of your vehicle, as insurance, tax and fuel will play a major role in whether or not you can realistically afford a specific model.
You may also wish to seek out a personal loan but this, as always, should be done with caution, with every step being made to ensure you meet your monthly repayments and avoid slipping into unmanageable debt.
Hire purchase essentially spreads the cost of buying a new car, where you will pay a deposit – usually around 10% of the overall cost – and then continue to pay the rest in monthly blocks. The car is not rightfully yours until the final payment has been made but it does eliminate the need to hand over large sums of cash from the off and payment schedules can often be flexible.
If you know exactly what you want from your new car, sometimes you can find specific, tailor-made packages that are customised on your behalf to fit your individual needs. A great example of this are the best car finance deals from BMW, where regardless of new or used and which purchase or hiring method you want to use, they will take care of all the legwork and fine tune the deal before you sign the dotted line.
Essentially it is a case of weighing up the options and choosing a method that best fits your budget and lifestyle but there are enough ways out there to ensure that everyone has a chance of getting hold of that dream car.
Personal Contract Plan
This is a derivative of Hire Purchase, where you pay monthly for an agreed duration of time before either paying the rest of the car’s current value and owning it or handing it back without any further payments. This allows you to try various different models without feeling committed long term and often results in significantly lower costs overall but the mileage and condition of the car at the end of your contract can affect costs, so always be sure of the small print.
Personal leasing is a great option for those who don’t actually want to buy a car. You essentially borrow one from the dealer at a fixed, monthly rate – with maintenance and all necessary servicing included – and, providing you do not exceed the agreed mileage during that time, hand the car back with no further charges. This method allows you to rely on set payments and eliminates the fear of your car depreciating in value over time but you are restricted as to the mileage you can incur and the vehicle is never officially yours, limiting you somewhat when your contract expires.