Four Reasons to Use Car Finance

Blog post   •   Feb 11, 2011 10:24 GMT

The first question that all shoppers should ask themselves before investing too much time looking for a new car is, "how am I going to be pay for this car?"

Generally speaking, one of the the best ways to buy a new motor vehicle is to save up the money and pay for it in cash. Meaning that the car is completely yours and you have no further costs to pay out for the car itself, if you have the money available, it can sometimes be the best option.

However, sometimes using car finance can also be a good option. It can be preferable to buying a motor vehicle and paying 100% upfront because it allows you to spread the cost of the car over a certain number of months. Whether or not car finance is for you depends on your circumstances and your preferences. There are a number of places you can obtain finance such as a dealer, bank, leasing company or online. Whatever your choice for buying a car, there are four reasons why car finance could be for you.

1. Depending on your preferences, car finance can be preferable. If you are only likely to keep the car for 3 - 4 years, car leasing can be a good option because it is most often much cheaper than other forms of car finance (especially for cars that depreciate slowly such as BMWs, VWs, Audis, Minis etc) and at the end of the 3 or 4 years you simply hand the car back and get a new one. That is, you don't have the stress of having to sell the car or part exchange it.

2. You can very often get a great deal - if you went out looking for a car 10 years ago, chances are you would have got a better deal for cash than if you wanted to pay using one of the dealership's car finance packages. Many dealers will reduce the price of the car if you take a finance package.

3. It means you can get the car you want - when you have a limited amount of money set aside to buy a car, it means that you can only buy a car to that value. If you take out a car finance deal, however, you instantly open up a whole new market, as you can base what you can buy on how much you can afford each month - a figure which will often be more than the equivalent of spreading the money you'd saved over the same number of months.

4. It allows you to buy a car when you need it - one of the major benefits of using car finance packages is that they allow you to get a car when you need it, rather than requiring for you to save up money and buy a car when you can afford to, something which is often much appreciated when your old car breaks down and needs replacing immediately.