Four Tips to Avoid Overpaying on Your New Car Finance Deal

Unless you are in the minority, chances are you will need new car finance to fund your next vehicle purchase. Whether you are buying a new or used car, finance can be a tricky subject and you need to feel confident that you have obtained the best possible deal. Fortunately, these four tips can assist you.

Know Your Finance Limitations:

The main reason why many people have difficulties being overburdened with their new car finance is that they failed to note their own finance limitations. While many of us would love to drive around in the latest sports car, our finances are not likely to stretch to this. The same can be applied to even more modest vehicles. Before you begin car shopping or indeed finance shopping, you should be aware of what you can afford to pay in the long term. Ideally, your car related expenses should be less than ten percent of your average monthly earnings. This should leave you with enough disposable income to cover any unexpected expenses.

Offer Some Form of Deposit:

If you are financing 100% of the vehicle, you may find that if you need to change vehicle in the first year or two, you end up owing more than the vehicle is worth. This is especially the case with new cars but you may find that you have a similar problem with used car finance. The best way to avoid this scenario is to offer some form of deposit to reduce the amount you need to finance. Fortunately, most car dealers will allow you to use your existing vehicle trade in as a deposit on your new finance deal.

Check the Finance Terms:

One of the most common ways that you may find yourself overpaying on your car finance is through hidden fees and charges detailed in the loan terms. Many consumers see those pages of legal jargon and skip reading it completely before they sign. Unfortunately, these terms and conditions may lay out charges that will be applied to your account under certain circumstances. For example, early repayment charges are commonplace and could mean that you end up paying a percentage of the loan balance, should you need to settle the account early. While reputable dealerships will often highlight any finance fees or charges, it is always a good idea to read through the document and query anything you are unsure of, before you sign.

Take Time to Shop Around:

Don’t make the assumption that your bank can offer you the best possible deal. This can be a costly mistake which can be easily avoided by taking some time to shop around. Consider getting a quote and comparing it to the finance offered at the dealership. With the manufacturer offers and financial incentives available, you may be very pleasantly surprised.

If you are in need of new car finance, contact us. We have a great selection of new and used cars. Our sales team would be delighted to assist you with a finance quote on new or used car finance and help you to drive away in the vehicle best suited to your needs at an affordable price.

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Adney Smith is a writer across several reputed automotive web posts. He writes for many online journals and portals that are related to cars. He has keen interest on cars and follows the industry all the time.