How To Finance Your Family Car

Step 1: Choose Your Car

Once you've chosen your car (See VideoJug's film How To Find Your Ideal Car), before you commit, make sure that you can afford to meet the costs of maintaining it. For advice on this see VideoJug's film How To Get A Good Deal On A New Car.

Step 2: Get A Car That Is Cheap To Run

The bigger the car, the more expensive fuel, insurance and servicing will be. Not all cars run on petrol or diesel, "green cars" are generally cheaper to run. It's cheaper to get a green car that runs on LPG. It is also possible to convert your current car to run on this for about £2000.
Research the make and model thoroughly so you know what you should expect to pay to run your car. Clear out the clutter in your car, don't drive with the air conditioning on and all this will help you to use less petrol.

Step 3: Part Exchange Your Old Car

You can use your old car as part payment for the new one. Be aware that the car you're trading in needs to be in relatively good shape.

Step 4: Hire Purchase

If you can't pay cash the dealer may offer you a hire purchase agreement. This means you pay off the car in monthly installments. Until you've paid off the entire balance the company will own the car. Look out for deals with 0% finance and then you won't be paying any interest.

Step 5: Get A Loan

If you choose a loan, compare loan rates from banks, credit unions and online lenders by using their online calculator. Take all the financial paperwork along to the dealer when you go to buy your car.

Step 6: Private Contract Hire

A private contract hire means that you are hiring a car for a lengthy period of time at an agreed fixed cost. You pay a flat rate each month which will include the miles traveled, maintenance and servicing. It is cheaper than buying the car because it is fixed cost motoring. Research thoroughly online before you commit.

Step 7: Personal Contract Purchase

You hire the vehicle for a set period of time at a fixed monthly cost. At the end of the lease period you can either buy the car or return it. Research companies thoroughly online before you commit.

Step 8: Embark on a Car Sharing Scheme

Try sharing cars or the costs of journeys with your neighbours or friends. This is a great way to share costs of running a car and you can agree between you the cost of each journey. For advice on how to get involved in car sharing schemes visit www.carplus.org.uk and www.letslink.co.uk.