carloan's Blog

Buying A New Car: A new car is second only to a home as the most expensive purchase many consumers make. That’s why it’s important to know how to make a smart deal. Think about what car model and options you want and how much you’re willing to spend. Do some research. You’ll be less likely to feel pressured into making a hasty or expensive decision at the showroom and more likely to get a better deal.

Consider these suggestions:

Check publications at a library or bookshop, or on the Internet that discuss new car features and prices. These may provide information on the dealer’s costs for specific models and options.

Shop around to get the best possible price by comparing models and prices in ads and at dealer showrooms. You also may want to contact car-buying services and broker-buying services to make comparisons.

Plan to negotiate on price. Dealers may be willing to bargain on their profit margin. Usually, this is the difference between the manufacturer’s suggested retail price (MSRP) and the invoice price. Because the price is a factor in the dealer’s calculations regardless of whether you pay cash or finance your car — and also affects your monthly payments — negotiating the price can save you money.

Consider ordering your new car if you don’t see what you want on the dealer’s lot. This may involve a delay, but cars on the lot may have options you don’t want — and that can raise the price. However, dealers often want to sell their current inventory quickly, so you may be able to negotiate a good deal if an in-stock car meets your needs.

Trading in Your Old Car: Discuss the possibility of a trade-in only after you’ve negotiated the best possible price for your new car and after you’ve researched the value of your old car. Check the library for reference books or magazines that can tell you how much it is worth. This information may help you get a better price from the dealer. Though it may take longer to sell your car yourself, you generally will get more money than if you trade it in.

Buying A Used Car: Before you start shopping for a used car, do some homework. It may save you serious money. Consider driving habits, what the car will be used for, and your budget. Research models, options, costs, repair records, safety tests, and mileage through libraries, book stores, and web sites.

Before you buy a used car whether from a dealer or an individual: Examine the car using an inspection checklist. You can find checklists in magazines and books and on Internet sites that deal with used cars; Test drive the car under varied road conditions—on hills, highways, and in stop-and-go-traffic; Ask for the car’s maintenance record from the owner, dealer, or repair shop; Hire a mechanic to inspect the car. Paying for the car: Most people do not realise that they have capital locked up in their property which could be used for buying that special car of their dreams.

Release the capital tied up in your home with a home owner loan. The loan can be used for any purpose, and is available to anyone who owns their home. Home loans can be used for any purpose such as, new car, home improvements, pay of store card or credit card debt and debt consolidation.

Home owner loans are available for practically any reason. One of the most common types of home owner loans on offer are debt consolidation loans where the objective is to reduce monthly outgoings to a more manageable amount. A UK Home Owner Loan is great if you want to raise a large amount; are having problems getting an unsecured loan; or have a poor credit history. Many lenders look more favourably on people who are home owners as this demonstrates a commitment to repay a large amount of money over a long period.

A UK Home Owner Loan is a cheap, low cost, loan secured on your UK home. It frees up the equity in your home for you to use on whatever you want.

You may freely reprint this article provided the author's biography remains intact:

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Owning a car is no more a luxury but in fact it has become a necessity in our daily life. A car, being one of the most widely used mode of conveyance has become a must have for all of us. However buying a car is not so easy primarily due to a steady rise in their prices in the past few years. Every year most of the well-known brands come up with new snazzy car models, with upgraded technologies resulting in faster performance, which often tempts the customers to buy them. Buying a car is a costly affair and utilizing personal finances to finance your dream car may not be the best option as it may lead to sudden financial drain in your bank balance.

The ideal way of financing a car purchase is to opt for a car loan, however the ever-increasing price of new cars often leads to high EMI payments that can definitely be a burden. Buying a used car can be an extremely wise decision in such cases when the budget is a primary condition for purchase.

The primary objective of buying a car varies from person to person. There are customers who need it for daily use and then there are others who like to possess the latest trendy models that add an extra flair to their overall personality. The second category of buyers does not stick to a single model and often sell them off within a year or two after purchase. Some customers may even sell off their brand new cars due to some other reason as well. These cars are usually available in good condition and customers who are not very obsessive about possessing trendy models can surely opt for these cars.

Used cars can be bought at a much cheaper rate resulting to a lower loan amount and an affordable repayment plan. After purchase, new cars depreciate steadily in terms of monetary value whereas in comparison, a used car will depreciate at a lower rate. A New car has higher resale value than an old car and thus a brand new car is always more susceptible to theft. Theft or damage to a new car can increase the amount of liability to a greater extent compared to the increment in liability that might be caused due to loss in an old car. A good used car is free from all the above risks and hence is a much wiser investment.

However, before availing a Used Car Loan, the customers should be sure about the quality of the car loan. It is better to have a detailed look at the car, check for damages, inspect the engine and even take a test drive. Once you have zeroed down to the car that is perfect for you, just apply for a used car loan and get your purchase financed through a car credit company.

Most car buyers spend hours researching the makes and models of car before deciding which to buy. Then four out of ten rush out to the showroom and sign up for the car within 30 minutes of stepping inside.

But will their painstaking research extend to sourcing the cheapest finance package? Probably not. Whilst around 50% of new cars bought privately are purchased on finance, nearly 20% sign up in the showroom for the finance deal offered by the manufacturer. Unfortunately that could turn out to be a costly decision. With typical manufacturers finance costing 13.7% per year over a 3 year and including a 10% deposit, they could be throwing some ?1,800 down the drain.

Take someone buying a new Renault Megane Sport Saloon Privilege 1.6 and let's assume that it costs ?16,000 on the road. Including 3 years interest that means the full cost will be ?17,384. However, there is a much cheaper option. With a good credit history you could get a personal loan at only 5.5% and end up paying just ?15,631 – that's a full saving of ?1,753. This goes to prove the old adage that it pays to shop around. Rushing to accept the dealers finance package can hit your pocket hard – it's effectively giving back the discount we hope you negotiated!

OK, I can hear talking about the special finance offers that manufacturers are forever advertising. Yes, there are some really good deals - but always look closely. Some deals only relate to specific models with a set specification, often the cars that the manufacturers are having trouble shifting. A beware some deals have a sting in their tail. Take Volkswagens' current offer on the Polo E2. Their deal is advertised at 5.8% with a monthly repayment of ?99 over 35 months – sounds a great deal but look more closely and you'll find there's a final balloon payment of ?3,750 or alternatively you can trade in your E2 for another Volkswagen.

The car manufacturers use these deals to promote brand loyalty and encourage another purchase in 3 years time. They know that most cars will be traded in after 3 years rather than pay the large balloon payment.

Of course, personal loans and manufacturer's finance are not the only way you could finance your car.

The traditional way to pay for your car is through hire purchase. With HP you pay a deposit, usually of at least 10%, or trade in your existing car for at least the same value, and then use HP for the balance of the price. The loan is then effectively secured on your car. So in practice, your car still belongs to the HP company until you have made your last monthly payment.

Then if you want to sell your car before you've completed the HP agreement, there will almost always be an early redemption penalty – often up to three months interest. The HP company will also register its financial interest in your car with HPI the finance tracking agency. This effectively means that you will be unable to sell your car until you have paid off the HP loan.

Another alternative is Personal Contract Purchase, PCP for short, and in recent years PCP has become very popular. Here you also agree the mileage you expect your car to clock up each year. You then pay a deposit and part of the purchase price is deferred until the end of the agreed payback period. Your monthly repayments then repay the balance and the interest. These schemes are highly flexible as you can select the length of the loan and the size of the deposit but you'll find that interest rates vary considerably between lenders. The current average is about 12.8% - still well above the 5.5% rate for a cheap personal loan.

At the end of the PCP contract you'll have three options: -

Pay off the deferred balance and keep the car

Trade in the car using the trade in value to help pay off the deferred sum and hopefully leaving a balance towards a new car

Hand in the car and walk away with nothing more to pay.

This last option is always subject to your cars' condition reflecting normal wear and tear and its mileage is in line with the annual mileage you agreed when you purchased it. If the recorded mileage exceeds the forecast mileage, then you'll have an excess mileage charge to pay. The cost per excess mile will always be specified in the PCP agreement.

One of the big advantages of PCP is that the guaranteed buy back option effectively protects customers against excessive depreciation of their car.

As you would expect, car dealers take a commission for selling PCP contracts and to encourage you, you may find they'll agree a bigger discount on your car if you take their PCP deal. If your lucky, they may even throw in a low cost servicing package or low cost insurance. But take care. You'll need to do some homework to ensure that these extra goodies are truly worth the extra interest charged on the PCP contract.

Michael Challiner writes personal finance articles for Brokers Online, a large UK based financial website. Brokers Online offer most UK financial services including Secured Loans and Life Ansurance.