Car Finance: How To Beat The System And Get A Good Deal

Automotive Car Finance

Car finance is a necessity for many people that want to get behind the wheel of a vehicle that isn’t a rust bucket on wheels. Because of the high value of today’s modern cars, people can seldom afford to buy the models they want outright with cash.

It’s more convenient for motorists to pay a small cash deposit, and finance the outstanding balance. As with any financial product, there are ways of getting the best deal for your needs without paying a lot of interest.

The question is; how does one find a good deal and “beat the system” as it were? If you’re thinking of buying or leasing a car soon, the following top tips will put you on the right path:


Save up some cash

Do you have a lot of spare cash each month after you’ve paid your bills? If so, it’s worth your while saving up some of that money towards the cost of your new car. Some people opt for saving around 10% of the vehicle’s purchase price.

Ideally, you should aim for somewhere in the region of 30% to 50%. Car dealers won’t tell you this, but you’ll often get lower interest rates on car finance loans if you put up a significant deposit!

Of course, what if you can’t afford to save a large chunk of money? One option is to pay the deposit using a credit card.

Only, make sure the card you use offers a 0% introductory rate for the first 12 months. That way, you have time to pay off the deposit, and you can get your new car sooner.

Leasing versus buying

In the world of finance, it makes sense to lease things that depreciate and buy things that appreciate in value. To a large extent, that statement applies to cars. If you’ve got your eyes set on a car that’s worth the same amount as your annual salary, it makes sense to lease it.


There are some exceptions to bear in mind. If the car you want is only worth say a couple of grand, and depreciation is slow, you’d be better off buying it instead.

You can get car finance for both situations. There are many different leasing and finance products on the market for cars, with some applying restrictions like mileage. Before you opt for finance, make sure the deal is right for your needs.

Don’t focus on your monthly payments

All too often, consumers and especially car dealers focus solely on the cost of monthly repayments. That’s a bad idea for many reasons:

  • The payment might be low, but you could end up paying over a long period;
  • You could also end up paying more interest than the amount you’re borrowing;
  • Your financial situation will change in the future.

If you’re doing online research, you might have come across a repayment calculator for car loans. When you’re using such a calculator, make sure it gives you a full breakdown of all the costs, including the total amount payable.

Now that you know how to beat the system and get a good deal, it’s time to get busy. Good luck and thanks for reading!

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