Phil MeekinView Profile
A car is a big financial commitment so please do your research. With car finance & insurance costs to consider, your new car can be a financial headache
I have got the dreaded task of car hunting at the moment.
I’ve got no idea what make of car I want but I have certain requirements. If you like I am very fussy, but why shouldn’t I? The car hunt has taken 2 weeks so far and I am still no further along. I had a test drive in a lovely car, brilliant price, and all my requirements. Then I went away and did some research. The cost of fuel would be a fortune per month so that idea got scrapped.
I then did some general research on car insurance for certain vehicles based on mine and my husband’s details. I went on the insurance comparison website that provides you with numerous quotes for that vehicle. The top 5 were quite reasonable around £350 and they were companies I had heard of so even better. Then I scrolled to the bottom of the page and there were companies quoting me over £3k to insure the same car. I looked on what they offered compared to the others and I couldn’t spot any difference. Why oh why would anyone decide to pay £3k instead of £350??? I’d understand if it was £20 difference to get extra legal cover or even just to go with a familiar company, but that was ridiculous.
I am still plodding on with my car hunt and I know I am annoying everyone as each car I go past I say “I like that”, “oh I don’t like that” and “that would be ok if it was in a different colour” ha ha ha.
Anyone going through a similar drama please make sure you do plenty of research into the vehicle and costs before making the commitment to buy it:
Loan research, if needed:
- Some finance companies give you the option to hand the vehicle back without costs once you have paid half of the agreement, so this is a good get out clause if the vehicle isn’t right for you. The only additional cost would be for excess mileage or substantial damage.
- Ensure the loan interest rates are good.
- The majority of loans / HP agreements want you to pay a larger first installment.
- Some finance agreements also have lower repayments over the loan term but you end up with a balloon payment at the end which could be a substantial amount, causing you to extend your finance at the end of the term.
- Read all of the agreement and ensure you fully understand your loan term and repayments.
How much will the road tax be?
There is a huge variation in cost from £10 to thousand of pounds.
Don’t accept the first quotation on car insurance, shop around and use the comparison websites to make sure you are getting a good deal.
Some companies even do price match so it doesn’t hurt to ask.
Obviously the bigger the engine the more fuel you need, make sure you can afford to run it.
Ask if you get a warranty when purchasing the car, this might only be 3 months for a second hand vehicle but some garages offer longer warranties if they want a sale.
Make allowances in your cost to pay for recovery assistance for the year unless you are a mechanic.
For how much the basic cover costs it is well worth it.
Consider Gap insurance, this could be a one off payment or added to your monthly loan repayments.
If your vehicle is stolen, un repairable from an accident etc the insurance would repay what you paid for the vehicle not what the vehicle would be worth on that day, which could make you have a considerable loss and struggling to get a replacement vehicle of the same standard.
Don’t be afraid to check whether kids car seats fit in OK, pushchairs in the boot, golf clubs whatever.
You don’t want another expense of buying new prams etc.
A car is a big financial commitment so please do your research and good luck!!!