Finance Options for Buying a New Car

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Buying a new car is exciting. Choosing the model, taking a test drive, picking out the extras that will make it uniquely yours; we all love it! However, actually paying for the car can present a dilemma. Which route should you take? For a reputable and reliable auto dealer, head to In this article, we’ll explore the options to help you make an informed decision.

Personal Savings

The most straightforward approach to buying a car is to use your own savings. You won’t need to worry about repayments, accrual of interest, penalties, or arrangement fees. You’ll have a fixed budget in mind, which empowers your buying position and stops you from overspending.

The drawback is that it can make a significant dent in your rainy day fund. Give careful consideration to a realistic budget when you take money from your savings; don’t buy into sales spin, and only spend what you can afford.


Although it may not pay for the entirety of your new car, part-exchanging your old vehicle can knock off a substantial amount from your total payment. Do your research beforehand; go online to check the estimate resale price of your current motor. Then, when you’re negotiating at the dealership, you’ll be in a strong position to make your case for a stellar saving!

Personal Loan

Instead of taking a chunk out of your savings, you may prefer to pay for your car over a set time frame. There are several ways to approach this; one of which is taking out a personal loan. These are usually straightforward to arrange, particularly when you apply online.

You must assess your ability to pay back a loan in full before you take one out. Check out this guide to personal loan interest rates to gauge how much your loan will cost.


Leasing a car is essentially a long-term rental. Although you won’t own the vehicle, a leasing agreement allows you to enjoy all the benefits of a new car, including free maintenance, for a set period of time. Once the lease expires, you return the car. You won’t need to worry about depreciation in value, and flexible payment terms can be agreed with the dealership. If you want to own a car outright, however, this might not be the right plan for you.


Bridging the gap between buying on finance and leasing is the concept of hire-purchase. Under this system, you give a deposit to the dealership, then pay back a loan – which is secured against the value of the car – for a set period of time. Once you’ve paid back the loan in full, you don’t need to return the car; it’s yours to keep!

Credit Card

Depending on your credit limit, you may be able to purchase a car on your card. This can be a good idea if you have a low – or even better, 0% – APR applied, and plan to pay back the cost in full before your interest rate rises, and there’s no need to make a new application. Beware, however; it’s a risky strategy if you’re not able to pay back before high interest kicks in. We definitely wouldn’t recommend this approach if you already have a high APR.

There you have it; six ways to fund a new car purchase. Happy driving!

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