Looking to buy either your first or a new car? With so many options available, it can be tricky to pinpoint which one is best for you. But don’t worry, we’ve put together a straightforward guide on the three main ways to cover those upfront auto costs.
Why not read on to find out more?
- Self-funding
As its name suggests, this option involves the buyer paying from their own pocket, with no (or, if you’d prefer, little) assistance. So, if you’ve got enough to cover all upfront costs, why not do so? That way, you won’t need to pay interest, which a loan or borrowed money typically incurs. However, if you don’t have sufficient funds for buying, be aware that it could take a while to save.
Of course, this isn’t good if you’ve already found your dream car, and it’s likely to be taken off the market soon. And obviously, it may not be ideal if you’re working towards other big savings goal, like a mortgage deposit.
- Personal loan
If you’re unable to completely self-fund your new car, you could consider taking out a personal loan from a bank or building society. So long as your credit score is healthy, you’ll likely be entitled to an amount that covers the entire cost of your car. Compare the various providers out there, and you’re likely to find an offer with a good interest rate. Just head to a loans comparison website to identify the best deal for you.
For extra advice, you could always look to a financial advisor – just remember to choose an FCA-approved service. If you’re not sure what your credit score looks like, you can check it through a CRA (Credit Reference Agency) like Experian.
- Industry-based lenders
Not everybody has a perfect credit score – but if this applies to you, you needn’t worry. There’s a number of trustworthy lenders across the UK that provide funding to those that struggle to secure it from mainstream providers. Go Car Credit specialises in financial options for people with poor credit scores, so long as they prove themselves to be suitable applicants. And that’s just one example of a reliable lender based in the auto industry.
Select this option, and you could enjoy better leniency when it comes to repayment period lengths than you would with a traditional lender. As with any loan, if you aren’t 100% confident that you can pay the loan back, you may be better off sticking to your own savings.
It may sound like a complicated task – but financing a car can be easy. Once you’ve explored all the key options, you’ll be able to make the right choice for you and your chosen car.
