5 Ways to Drive a Budget CarCompact Cars, Bridgend
March 16, 2017 at 10:18 AM
Have you ever passed by a car dealership and admired a vehicle that you couldn’t possibly afford? If you have, there’s no need to despair. There are a number of ways that you could pay for a used vehicle without having to break the bank.
1. Hire purchase
1. Hire purchase
In the hire purchase model of payment, a buyer puts down a deposit then pays off the rest of the loan in agreed monthly installments. For example, a used car priced at £13,690 will cost £15,232.48 if bought through hire purchase. This is because you may reach an agreement with the lender to make a deposit of £1,105, make a car offer for part exchange of £2,799, get a rate of 10.3% APR, and pay installments of £305.68 every month. Additional payments are an acceptance fee of £175.00 and documentation fee of £149.00.
2. Car finance
This means that you will finance your new car through a dealership, online financial institute or a friend. If you borrow £7,500 in 48 months with an APR of 11.2%, a yearly interest rate of 11.2% and no deposit, you would pay £192.50 every month, a total credit cost of £1,740 and a sum payable amount of £9,240.
3. Loan from the bank
You could get a loan from a bank to purchase a vehicle of your choice. In this agreement, you will be required to pay a bank the amount of the car and a finance charge, over duration of time. This option may offer you a chance to shop around for lenders with credit terms that will work for you. For instance, if you borrow £ 7,500 at a length of one year, an APR of 3.3%, monthly payments of £636.06 and annual rate interest of 3.2511%, you will repay £ 7,632.72.
4. Leasing a car
Leasing a car is advantageous because it allows you to drive a new car that is under warranty and needs minimal maintenance. In addition, you could get a larger, better equipped vehicle. Most dealerships like leasing since it has a stronger customer loyalty rate. Assume you are going to lease a vehicle from 36 months, with a cap cost of £ 28.802. You will get a residual of 54% after the three months (£ 15,551.298) and an APR of 8%. The monthly depreciation fee is £367.982, Monthly finance charge of £147.688 and sales tax of £30.938 (6%). This adds to the total monthly payment of £ 546.608.
5. Buying in cash
Alternatively, you could save up to get your dream vehicle. Set an aim based on the amount of money that you need before calculating how much you need to save every month to be able to purchase the car. For instance, if your saving goal is £7500, you could save £500 every month to be able to buy the car in 1 year and 3 months.
Buying a vehicle doesn’t have to be nerve wrecking. There are a lot of financial options that will allow you to buy a model that you like or to replace an older car. You can get low deposits from Compact Cars, a dealership that offers buyers a pay as you drive plan. Your application will be accepted regardless of the credit that you have. Everyone should be able to afford a car, whether their credit is good or bad.