Car Loan

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Some car loan providers offer special deals like cheaper insurance or breakdown recovery. Other products to consider are personal purchase schemes or flexible borrowing products. And ensure that car purchase is tax effective in the first place.

Along with home improvements, buying a car is one of the most popular reasons for getting a loan. There are plenty of car loan special offers because cars are expensive and for most consumers buying a new car without a credit deal of some sort is impossible. The useful life of a car can predictably outrun the period of the car loan, so it's not a giant leap into the unknown in financial terms.

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When buying a car on credit, before going for a standard loan, consider whether it's the right product for you. If you are associated with a company, would it make sense in tax terms for the company to buy you the car? If so, leave it to them. If you're buying the car, would a part-purchase scheme be better? The scheme operates like a loan to cover not the cost of the car, but the cost of your use of the car over a shorter term such as 3 years. You won't own the car, but your expenses will be fixed across the term, and you have no further obligation thereafter. The real allure is fixed-rate motoring, because many of these schemes can also include servicing, and recovery.

You could also consider a standard car loan. Some companies offer incentives for car buyers such as insurance discounts or breakdown recovery. And don't underestimate the value of flexible borrowing. If you're buying a £5000 car second-hand, and you manage to beat down the vendor to £4500, a flexible car loan will let you hand back the extra £500 and you won't pay interest on it. Across 3 years, the interest of £500 you didn't need will be quite substantial.

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