BE­WARE THE ‘ADD-ONS’.

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When I took out a car fi­nance deal I was pushed into tak­ing out tyre, al­loy and dent in­sur­ance. Why I hear you cry?! Well I could have been held li­able for some dam­age un­der the car fi­nance deal at the end of term – though the rules were vague. To­tal cost: £1,000. And the tyre pol­icy was rub­bish when I claimed on it!

Car fi­nance deals are sold with the prom­ise of hav­ing some left-over cash at the end of the agree­ment that will ‘pay the de­posit on your next car’.

This works be­cause the firm es­ti­mates what the value of the car will be at the end of the deal and what the ‘bal­loon pay­ment’ will be (the amount you pay if you want to keep the car). There then fol­lows an enor­mously com­pli­cated cal­cu­la­tion that I won’t bore you with.

Suf­fice it to say, in prac­tice, this rarely seems to oc­cur. So

TRADE IN VALUE:

Ru­mours abound of cars fit­ted with im­mo­bilis­ers for peo­ple who de­fault too!

For all their com­pli­cated ter­ri­ble­ness, car fi­nance con­tracts are reg­u­lated fi­nan­cial agree­ments (un­der the Con­sumer Credit Act) which means you can go to the fi­nan­cial om­buds­man if you’re un­happy with the re­sult of a com­plaint.

In short, be scep­ti­cal, only agree to take a car you can af­ford, not one that’s out of your price range, and walk away if you get the hard sell!

Check all the de­tails if you opt for car fi­nance

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