Finance

6 Cost-Effective Ways to Fund a New Vehicle

Finding a new vehicle can be a very expensive venture. Second-hand cars are always a cheaper option, but they come with inevitable baggage, such as years of damage, hidden repairs that need doing and high mileage on the clock. So, if you’re looking for ways to cover the cost of a new vehicle, then here are a few top tips.

Finance: Most vehicle retailers know that the average Joe will find it nigh-on-impossible to cover the cost of a new vehicle on top of financing a mortgage and covering other daily costs. This is why most retailers will offer financing options to customers, so it is possible to make a sale to someone who would otherwise not have the budget. Meanwhile, companies such as Auto Finance Online will find you the best finance deal for the motor home you are after.

Car-Finance

Put 20% Away: If you’ve heard friends and family suggesting that you put away 10% for a deposit, then you may want to think again. It’s recommended that, in order to be extra safe, you put away at least 20% of the total cost. This ensures that you have over and above the basic amount for a deposit. While it can be tempting to part with your funds as soon as you have the minimum, you will want to be able to cover any fees or extra surprise costs along the way.

Track Your Finances: If you want to save regularly, then the most efficient way to do this is to track your day-to-day spending. This will help you to keep that direct debit amount free every month and ensure your payment security. It’s also good practice to learn that a little bit of sacrifice makes for better savings.

Check Your Credit Score: This will be cost-effective for you in the long-run: if you have a poor credit score, damaging it further will prove to be incredibly expensive for you in the future. The best approach to take before financing a vehicle is to double-check your credit score and see if it can be improved (paying off credit card debts, etc.)

Set a Budget: While it is nice to know that you could potentially own the latest high-end hatchback, it is not always wise to shell out for one. Paying off the finance may take you an endless number of months, and the payoff may not even be worth it for you. The best approach is to set yourself a budget and stick to it.

Calculator

Check The Interest Rate: If you want to ensure that you are getting the most cost-effective deal from your financing scheme, then double-check the interest rate the lender is going to set. This can turn a very reasonable price into an extortionate one.

The best way to cost-effectively pay for your own vehicle is to do your research and prepare beforehand. Double-check that the rates your lending is setting you are fair and justified, and make sure you have a sizeable deposit to start you off.

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One Comment

  1. Informative, 20% is a good deposit to put away for a car but setting the budget is very important. I am looking new car for driving lessons. I am trying to put as much deposit as I can. It will put less burden on me in sense of monthly installment.

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