Sensible Steps To Car Ownership – Car Finance

There are a number of factors that you should take into account when deciding to buy a car. It is for most people the biggest financial commitment they make, after buying a home, so it is important to think carefully before spending your money. It’s best to work your way through the process carefully, considering each step along the way.

Step 1: Type of Car
What do you need a car for? If it is to get to work and back and it is a long distance to travel, then a diesel engine may be more economical than petrol. If you have children, then a large family car would obviously be more suitable than a sports car. For those who live in the countryside, a four-wheel-drive vehicle might be the most suitable choice.

Step 2: Your Budget
How much can you afford to spend? You might be in a position to buy the car outright from savings or you could require car finance. If it is the latter, you should prepare a monthly income and expenditure statement to establish how much you have available each month for the loan repayments.

Remember that you also need to take into account other costs such as fuel, servicing, MOTs, car tax, insurance and breakdown cover.

Step 3: Amount of Finance
Having established how much you can comfortably afford to spend per month, you now need to find out how much you can borrow. This will depend largely your income, the interest rates available and the term of the loan.

You should approach a number of different providers to establish how much they would be prepared to lend you before inspecting any cars. You will then at least know that you have an agreement in principal for the car finance, which could help during your negotiations with a dealer about the price you are prepared to pay.

Step 4: Where to Buy a Car?
Nowadays, there are many different places to find a car. The internet is a popular choice but obviously you would still need to visit the owner of the car to physically inspect it. Most local newspapers also have a car-sales advertising section that can prove useful. Of course, the most obvious option is to visit several car showrooms in your area. It’s important to take your time – don’t just go for the first car you see.

Take someone with you to provide support and also provide a second opinion about your intended purchase. Another pair of eyes may spot something that you have missed.

Step 5: Test Drive
You should drive the car before buying it to check for any faults and see if you are comfortable with it. You may wish to have the car inspected by an organization such as the AA to give you peace of mind.

Step 6: Purchase Price
Be prepared to negotiate about the asking price. Just because someone is asking £5,995 for a car doesn’t mean to say he will not accept a lower figure. If you don’t ask, you don’t get.

Buying a car is a potentially big commitment and requires thorough research. There are many factors to take into account in addition to how you will finance the purchase. Taking your time and making the right decision can lead to many years of trouble-free motoring.

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