Sunday, 13 January 2013

New car purchases - funding options

Once you’ve found your dream car, you will have to pay for it.  It’s best to work out how you’re going to pay for the vehicle before you set foot in a dealership or meet with private sellers.  Key topics to think about include:
  • Sources of funding
  • Types of financing
  • Other funding considerations
Sources of Funding

Sources of funding range from car dealers themselves, through to financial institutions, and even yourself.

Your Own Bank Account

Funnily enough, few of the sources I researched to write this article mentioned actually paying for a car out of your own pocket!  In our credit-fuelled society, many people have not had the experience of saving up for a major purchase.  But if the car is going to be used for predominantly private purposes, this is by far the cheapest source of funding.

If you don’t have a large amount of funds in your savings account, consider making the car payments you would pay under a loan into an offset account or high-interest savings account.  Once you have enough money to purchase a car, keep on making the payments to your account, and when you want to replace the car, the funds will be there.