FINANCING YOUR NEW CAR - MAKING YOUR MONEY WORK HARDER

When you're buying a car, used or new, you have endless choice of makes and models at your disposal - the same applies when it comes to finance. As a result, many motorists find the world of vehicle financing quite baffling.

Yet the finance business is not at all complex. Providing you shop around and weigh up the options, then choose a responsible lender, you're unlikely to find yourself pushed into a bad deal - they do, after all, want your repeat business. Nor will they loan you more than you can, in normal circumstances, afford to repay or they themselves could end up losing money.

Why Borrow?

But why borrow in the first place, particularly if you have the available cash sitting in the building society? Well, there are several reasons. For a start, if you take it out of your account, you could lose plenty of interest. You also won't have it for unexpected emergencies, at which time borrowing money could be more difficult.

Nor would having cash up front give you more bargaining power. When you buy a car in finance, the dealer actually sells the car to the finance company, which, after deducting your deposit, pays the balance to the dealer in a day or so. In addition, dealers usually receive an administration fee from the finance company for the work they do in setting up the account. In short, your local garage will be just as keen to cut a deal, however you choose to pay.

How & Where To Borrow

Take a little time to consider your options, however keen you might be to get behind the wheel. It might sound obvious, but be clear about exactly how much you can afford. Work out your monthly outgoings - miss nothing out - and subtract the total from your monthly income. Leave a small surplus to cover any extras - loan protectio...