Inside track on car finance

plans for used cars as well, while the RAC’s Flexiloan allows drivers to stagger payments in a similar way.

Personal contract hire (PCH) is another option, where you make an initial deposit then lease the car with monthly payments for between one and three years, before handing it back. Again, watch out for mileage limitations.

TAKE YOUR TIME

Admiral Financial Services chief executive Scott Cargill said: “Car finance can feel intimidating as the wording and acronyms are unfamiliar. Take time to fully understand the various products before signing up.”

Almost half of drivers who have previously used car finance say they did not fully understand the terms and conditions, according to research from Europcar Mobility Group UK.

Many thought breakdown cover and servicing were included in PCP, yet this is rarely the case and motorists need to budget for the costs.

Europcar has launched a new type of finance called Long Term Flex that includes maintenance, servicing and roadside assistance.

‘With PCP you switch to a newer vehicle every few years and never actually own it’

DO THE MATHS

Robert Oag, head of loans at Sainsbury’s Bank, said buyers should take time to read the small print on any deal, and calculate the overall cost: “Doing some sums will save you money in the longer run. Remember to include the deposit, monthly contributions and total interest paid.”

Personal loans are a popular way of covering some or all of the cost of a car. “The advantage is that you know your monthly payments and final repayment cost from the outset,” he said.

Also, work out the cost of running your chosen car, including insurance, fuel, road tax and any toll payments, to see if you can afford that.

BRACE YOURSELF

Haggling with a dealerships is recommended by Oag, who added that the best time to go for a discount is just before and after new plates are introduced in March and September.

Sort out your car insurance and vehicle tax in good time. He said:

“You need these in place as soon as you’ve become the legal owner so get them sorted in advance to avoid hold-ups.”

You cannot beat that new car feeling, just make sure you are not paying over the odds for it.