When it comes to buying a car, you might spend a long time picking the perfect make and model but aren’t sure how you’re going to pay for it. With that in mind, here are three options when buying a car.
The first option that is available to you is to buy the car outright. This means paying the exact amount that the car is selling for straight from your bank account.
You should always try to haggle and get the best possible deal on any car, though. This can be a good choice if you have the money for the car and are able to pay upfront.
This means that once you have made the payment, then you own the car and don’t need to manage any monthly payments. You just need to have the insurance and then pay for petrol.
After that, you are good to go, and don’t owe anything. This can be the quickest method of buying a car as you do not need to contact any finance agencies (see the next point for more on finance).
If you can afford to do it, then it also ends up cheaper in the long run as you do not pay any interest on the cost of the car either.
The other main option when buying a car, is to buy it on finance. This means that you will effectively take a loan out on the car and have to make monthly payments to a finance agency.
The amount that you pay each month will differ depending on how much the car was and how long you have to pay off the finance. Finance can be really helpful if you cannot afford the full cost of the car right now as it can spread the cost over a few years.
However, this means that you will end up paying more than the value of the car. There is interest in the finance, and this means that you end up paying extra.
It might be cheaper in the short run, but it is definitely more expensive in the long run. However, finance can allow you to buy a car when you otherwise would not be able to afford to do so.
The final option you have is to not buy. This might seem like a strange suggestion, but it might be the best one for you. You need to consider whether you actually need the car.
Can you get away with simply using something like Easy Car? If you do not drive often, then this might be best for you.
You might also want to look into whether leasing is a good fit for your situation. Cars are expensive, and that goes beyond the initial purchase.
You also need to pay for insurance and maintenance. Both hiring and leasing avoid both of these issues as they are generally included in the hiring or leasing cost.