Buying a car Independent car finance

Sorting out your own car finance can be cheaper than the dealership.

Buying a car with cash

This is the simplest car-buying option if you have the funds to spare. But don’t assume that cash is king – car dealers make more money from finance customers.

If you’re buying a new car with cash, don’t brag about it. Instead, let the dealer think you’re considering finance, until you’ve agreed the bottom-line price for the car.

Only then should you push for a cash discount. Bear in mind your cash could be better invested elsewhere if you can get cheap, or interest-free, finance.

Buying a car with a personal loan

There are very competitive interest rates available for people buying a new car, but you’ll need a squeaky-clean credit record to get them.

You can borrow up to £25,000 on an unsecured personal loan and repay the sum over one to seven years. You own the car from day one, but if you default on payments the lender can take you to court. Taking out a loan effectively makes you a cash buyer, so see the tips above.

Buying a car with a credit card

Buying a car on a credit card requires a large credit limit and even more self-discipline. If you have a fixed, low-rate card it can make sense, but be aware that some dealers charge up to 3% for credit card payments and others may not accept cards for large amounts.

On the plus side, the card issuer and dealer are jointly liable for resolving any problems with the car.

Buying a car with mortgage equity

Adding a new car to a low-rate mortgage can bring a dream car within financial reach. But failing to pay it off quickly can double or triple the overall purchase price. What’s more, your home will be at risk if you default on payments.

Planning to buy your next car but need help getting the best finance deal?

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