How To Save On Your Next Car

Most of us can’t afford to pay out a lump sum for an expensive car, so taking out a loan is the sensible approach. If you’re beginning to consider car loans, follow these top tips to ensure you find the best deal. 1.  Shop around: The best way to save on your car loan is to play the market. This might seem obvious, but in fact only 40 per cent of those looking for finance take the time to look at the different options. Visiting a range of providers, such as Alliance and Leicester and Abbey International, is a good way to compare quotes on car loans. You can also use a price comparison website like Gocompare.com. 2. Plan before you buy: It’s best to have your loan set up and paid into your bank account before you buy your car. Otherwise, you risk being pressured into taking out a loan from the car salesperson – and these are generally on the expensive side. Some lenders are able to process and pay your loan money on the same day, but express services will generally cost more. It’s best to set your loan up approximately a week in advance and avoid last minute charges. 3. Know your limits: It’s important to budget realistically for your new car. You should take into account the cost of tax and petrol as well as the cost of repaying your loan. Another important aspect to include in your calculations is car insurance – to work out how much this is going to cost you, get an estimate from a company like Co-operative Insurance or consult a price comparison website.  Excluding loans, Sainsbury’s Bank estimates that it costs an average of £2,053 per year to run a car. 4.  Beware of hidden charges:  Look into any extra charges before taking out your car loan. Does your lender exact a fee if you pay by credit card? Do you really need that extra payment protection? Most importantly, does your bank account have sufficient funds in it to account for repayments? If not, you could find yourself faced with significant charges. 5. And finally: Think carefully about the type of loan you take out. An existing financial provider may be able to offer you a special rate on your car loan, or you could think about buying a car with a 0 per cent credit card. Look into all the available options before making a commitment, and you should be able to save money on your next car purchase.