What is the best way to finance my car? have you been wondering?
When it comes to financing your car you have several options and it is important to consider them all to find out what works best for you.
Times have changed
It used to be the ideal solution to buying a car – simply find a great used car that you could afford and pay outright. They were plentiful and you could shop around to find one in in your price range. This is what I would always do and I pretty much always paid in full and outright.
Due to supply issues, since COVID the price of cars has risen across the board and buying a used car with a one off payment is now beyond mine ( and many people’s means) Petrol prices and car maintenance costs have also increased.
According to a recent UK survey car finance will undergo some significant changes over the next few years as a result of the current climate in motoring.
I think it is really important if you take on Car credit finance to find a package that totally suits you, but the market is really changing. Let’s take a look:
Apparently personal contract plans are expected to pretty much stay the same as they are now but may start also appearing as something you take on with a second hand car.
According to the report buyers are wanting shorter car finance deals so they can change their cars more regularly. They also found that customers are no quite so longer interested in outright ownership as much as they used to be hence the interest in renting and leasing.
The report additionally discovered that most car owners would actually like to simply pay a monthly fixed lump sum towards service and maintenance. I am so on board with this final finding – it would take so much worry away!
As the demand for electric cars increases so does the amount of people looking for fiance to afford them. Petrol and diesel cars will no longer be made after 2030 so their prices will start to dip.
Renting and leasing
Renting and leasing cars are also set to become more and more popular propositions . This might be due to costs but also likely due to eco concerns. Obviously during COVID renting was off the table.But now suddenly, with the end of restrictions, everyone wants to embrace their freedom get in their car and visit friends, have days out and go off on holiday.
Leasing is convenient but can work out to be one of the most expensive options in car finance. When all is said and done ownership is still considered the most cost-effective option.
The Used car market
It is believed the used car market will most likely recover – I certainly hope so ! As the car finance market respond to peoples financial concerns then trade should pick up and more used cars will be available.
It may be that you feel you need to buy new whilst there is a scarcity of used cars and they have risen in price but the facts remain it is still a great deal cheaper to buy a used car.
I am by no means a finance expert but personally I would make sure my car finance payment plan had a little flexibility in it (because as we have all seen over recent years life can be unpredictable) and that I can easily afford the repayments that I agree upon.
Nobody wants to default on a car finance plan and possibly lose their vehicle!
You might also like this post on driving an EV