Unbelieveable! Six speedy routes to raise the cash for a new motor

 Lady in red: Susan Dove usually buys a new car every three years 
Proud buyers will drive 424,000 new cars – displaying the latest ‘63’ number plates – out of showrooms this month. It will be a sharp rise on the same time last year when 360,000 vehicles were bought
Here The Mail on Sunday explains the finance options available if you are thinking of buying a new motor.

1.) PERSONAL LOAN

The most popular way to finance a deal is to take out a personal loan, according to research by What Car? magazine.

By arranging your finance independently of a car dealership you can shop around without fear of being seduced by sales patter.

 

CHEAPEST RATES ON £7,500+ LOANS

	Provider	APR
1	Sainsbury's	4.8%
2	Nationwide	4.9%
3	Derbyshire	5.0%
4	M&S	5.0%
5	Clydesdale	5.1%

Price comparison websites indicate that the best loan rates for purchasing a car start at about  5 per cent APR.
Rachel Springall of financial research company Moneyfacts says Sainsbury’s Bank has one of the best deals, offering loans of up to £15,000 at 4.9 per cent APR over five years. A £15,000 car would cost £281.65 a month. Spending above this level would incur interest charges at the higher rate of 7 per cent APR.
The best rate for a £20,000 loan to buy a car is offered by HSBC at 5.1 per cent APR, but is only available for existing customers.
Most personal loans are set up on an unsecured basis, so your home will not be at risk if you fail to make the loan repayments.

 

2.) PERSONAL CONTRACT

This sort of arrangement is favoured by motorists who like to regularly change vehicles.
Customers need a deposit of up to a third of the price. They must then make monthly loan repayments over three to five years. They have several options at the end of the loan period.

On a budget? You can still bag a Beamer

Not everyone can afford to buy a new  car this month. Nicholas Daw, 21, of Launceston, Cornwall, has just taken delivery of a BMW Series 3 after arranging an £8,000 personal loan with Halifax.
The lorry driver was unable to afford a brand new ‘63’ registration motor. So instead he chose to buy second-hand. His loan over two years will cost him £359 a month at 7.4 per cent APR.
Nicholas says: ‘I went into a BMW dealership and the salesman was over me like a rash. I almost buckled and bought a new car using a personal contract purchase deal, but I realised after getting home that it was not quite right for me.
‘My “new” BMW is nine years old and I bought it in a private sale. The loan payments are within my budget.’

Provided they have kept the car in good condition and stayed within the mileage limit agreed, it will have a minimum guaranteed future value.
This can be used as a deposit to purchase a new car or the driver can pay off this sum and own the car. Alternatively they can walk away with nothing more to pay.
A £29,000 Audi A4 purchased through car dealer Sytner with a £4,135 deposit requires 47 monthly deposits of £299. The loan rate is 6.1 per cent APR and the minimum guaranteed future value is £10,830.
Accountancy clerk Susan Dove has used personal contract purchase on a regular basis to buy the latest Renault Megane.
Ten years ago, she traded in her old Renault Five, using it as a deposit for a new Renault Megane with a local Renault dealer on a personal contract purchase deal.
She paid £170 a month to keep the car for three years after which she used the minimum guaranteed future value to trade up for a newer model.

 

Susan, from Watford, Hertfordshire, says: ‘It is a great way of getting a new car every three years or so and my deal also included attractive extras such as free breakdown cover. But last year when I went in to Renault I did not feel so excited about getting a new car so I paid £3,500 to keep the old one.’
Now the car is worth only about £2,500 second-hand, Susan is considering using it as a deposit in another personal contract deal for a new Renault Dynamic.

3.) HIRE PURCHASE

Those who buy using hire purchase do not own the car until the final payment is made.
Buyers put down a deposit which is typically 10 per cent of the price, although it can be as much as 30 per cent. They repay the rest in monthly instalments over two to five years.

Rethink: Lorry driver Nicholas Daw opted for an older BMW

You might expect to pay a typical APR of between 9 and 12 per cent.
There are a few ‘zero’ per cent deals offered by dealerships desperate for sales. These can prove great value but may require a large deposit – often as much as half the price of the car. Dealers charge full price for the vehicle.

4.) CREDIT CARD

Paying with a credit card charging zero per cent interest is fraught with danger.
You must clear the card balance before the zero per cent offer ends to avoid paying over the odds. 
According to Moneyfacts one of the best credit card deals is through Tesco Bonus Clubcard MasterCard which offers zero per cent interest on purchases for 18 months.
The maximum amount you can borrow on the card depends upon your credit rating and could be as little as £400, but some applicants will be eligible to borrow £10,000.
After 18 months, interest charges of 16.9 per cent apply.

5.) LEASE

With a lease agreement, you simply rent the car. Monthly payments depend on the mileage agreed and on how long you want to keep the vehicle.
At the end of the lease the car is simply handed back.
A lease can ease the headache of fast depreciation.

6.) CASH

The AA motoring organisation says offering cash can help you knock 10 per cent or more off the asking price of a new car. With cash you can also haggle over ‘free’ extras such as car stereos and trim.

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