After your home, your vehicle is one of the biggest purchases you’ll make, whether it’s a car, truck or motorhome. Unless you already have savings, you might be looking to finance a vehicle, and there are many options for doing so, but it can be confusing when working out what’s best for you. Here are some ways you can pay for your next vehicle.
If you have decent savings and don’t like being in debt, then paying upfront in cash could be your best option. While it means you own the vehicle outright, there are pros and cons to paying in one lump sum, such as:
You may be excluded from certain dealership deals
You no longer have that money in your account if an emergency comes up
If you get a decent interest rate on your savings, as a low-interest loan may mean more money in your pocket overall
If you do decide to pay in cash, make sure you get the best possible deal, check out lots of dealerships and see what special offers or extras you can negotiate.
If you’re planning to borrow to finance your car, then specialist vehicle loans are often the cheapest way. You choose your vehicle, so you can take your time looking at the Bailey Autograph and other new motorhomes, and you fill in an application, either online or through the dealership. Normally, they’ll ask for a down-payment, but there are often deals available for those with little or no deposit. You’ll then have a choice of the length of the loan, and you can find out your repayments.
Some auto loans pay off the entirety of your balance, while others are ‘conditional purchase’ type schemes where you get lower payments, but have to pay a balloon payment at the end of the term if you want to keep the car. If you change cars a lot, you might want to pick the latter, but if you would rather own the car at the end, then you should aim to pay it off.
A Standard Loan
If your credit is good and you’re always getting loan offers, then you may decide to take out a standard bank loan to finance the car. This gives you many of the advantages of being a cash buyer, including flexibility, but again it means you can miss out on special offers such as free extras or services. You should calculate your monthly payments compared to rates offered by auto loan companies, and if possible, try to take out the loan over a shorter term to save on interest. If you aren’t getting good loan rates, take a look at your credit file to see if there’s something holding you back.
When it comes to financing a vehicle, you have plenty of options, many of which will depend on your income, credit rating, and whether you’re buying used or new. It’s important to look through all options and compare rates to ensure you get the best possible deal.