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Payment Options when Purchasing a Car

We are considering changing our car as it is not really adequate for our needs now we are a family of 5. Now Mr Squishy (our youngest of the 3 children) is getting bigger changing our car is something we have been giving serious consideration to.

DSC03016For me finding the right vehicle can be blooming difficult. Let’s face it, I can’t get anything smaller than a five seater unless I plan to have hubby sit on the roof when we go for family outings which I doubt he’d appreciate with the fabulously erratic British weather. Once the obstacle of choosing the car is out of the way then we have to think about how we will pay for the car.
We need to look into selling our car privately first as of course we will get more for our car selling it ourselves then part exchanging. Part exchanging is always a consideration though for those that have a car that is on its last legs or really can’t face selling it themselves.
How will we pay for the car?
There are various options available that will of course depend on individual circumstances.
1. Pay in cash. Not an option for all for obvious reasons but the cheapest option.

DSC041902. Pay by credit card. This can give you more protection but be aware that some companies charge a card handling fee and not all will accept credit card payments.
3. Take out a personal loan. This will spread the cost over a certain time period but repayments can sometimes be higher than for other options. A possible option for us but for those with a poor credit rating it can be very hard to impossible to do this.
4. Car leasing. This is similar to a long term rental where you would pay monthly for the use of the car. There are 2 main types of car leasing personal contract hire (PCH) and personal contract purchase (PCP). There is a millage restriction with each of these that can put people off even though the payments for this can be cheaper than other options. PCH isn’t really a great option as you will not own the car at the end but with PCP you are given the option of a balloon payment at the end of the contact to buy the car.
These options are not always feasible for those with a poor credit history, CCJ’s, IVA and it can make buying a car difficult. Not wanting to leave out people in this position I looked to see options for car finance if you have a poor credit history and want to borrow up to £25,000.

With any of the above options your main consideration should most importantly be can I afford this? There is no point paying for a car with a card, loan etc. unless you can afford the repayments.
I must admit now that I have considered my options I am looking forward to searching for the perfect car for my family, wish me luck!

Car 1


This Post Has 39 Comments

  1. I have been fortunate enough to buy my car outright this time around but there would be no way I could right now. Great post 🙂

    1. Thanks Harriet, I am glad you liked the post. It’s nice that it is useful for others too.

  2. Oh how exciting! Good Luck, it is such a huge decision and investment. Kaz x

    1. Thanks, I love looking at cars on the internet it’s great fun.

  3. Some good tips here, I hate buying a new car I usually leave it up to my husband now x

    1. Lol, I don’t blame you it can be the easier option although I like to have some say in the matter.

  4. I really want to get a new car (although not a brand new one) and I don’t know what option to go for. Financing a car seems to me like the best option x

    1. It can be depending on funds available. Happy shopping.

  5. This was really helpful as although I drive I am get to get a car, thanks for sharing xxx

    1. Glad you found the post useful Emily, I thought I would share as I was researching anyway.

  6. These are some good things to think about. We might end up replacing our van sometime soon.

    1. Glad you found this useful, I hope this has helped you decide what to do in relation to payment.

  7. Lots of great options here. We are looking in to buying a new car at the moment.

    1. Wow good luck, it’s fun isn’t it!

  8. I think I will avoid paying for a car until I can afford it upfront. I know it will take longer but I’d rather not have a huge loan hanging over my head! Student loan is bad enough..

    1. That’s probably the best option student loads can grow quite a bit. Good luck.

    1. I’d love to pay cash for a new car, wouldn’t that be lovely 😉

  9. This is really interesting and something I’ll book mark, I bought my first car just from a friend at work so literally just deposited the money in her bank account but this will be useful for when I eventually buy a new one!

  10. It’s useful to see the options laid out like that. Hopefully we won’t be needing a new car for a few more years though!

  11. This was really helpful! We part exchanged our old car for the one we have now

    1. Glad you liked the post Rebecca. Congratulations on your new car purchase.

  12. Buying a new car can be so stressful, especially working out how to pay for it. I did look at hire purchasing my last one but just couldn’t get my head around it all. Good luck with your search and selling your old one

  13. Good luck with getting your new car, it definitely takes some thinking when it comes to finding the right option. x

    1. It sure does, I think choosing the car is the hardest part.

  14. I’ve only owned two cars so I’m not really experienced with this. Paid cash for both of mine but if I were to buy another I’d take a bank loan if I were able to get one as I think that would be the best option for me 🙂 xxx

    1. Thanks for your comment Laura. Good luck with your future car purchase.

  15. Some great tips here. We’re desperately needing a new car so we’re looking into our options.

    1. Good luck with the car shopping, glad this post as been useful.

  16. Some great tips thanks!

  17. This is a great post for anyone wanting to buy a car but not able to pay outright.

    1. Thanks, I was doing reasearch so thought i’d share.

  18. Great advice
    Need all the help I can get when buying a new car

    1. Good luck Margaret, ave fun with your car search.

  19. Really useful post – a car is probably one of the bigger purchases that people make, so it’s good to look at all the options before making a decision.

  20. I have always bought my car on finance as we just don’t have the kind of money to go and pay cash. sometimes you can get deals where it is 0% finance so you actually don’t end up paying any extra, definitely worth waiting until the right time of the year!

  21. another option would be a car auction or ebay, you can have some right bargains. Our cars come from ebay or car auctions and we pay a fraction of the forecourt prices.

  22. Apart from our first car, which we bought new, we have always bought second hand cars. We try to save up before buying, so that we can pay cash rather than taking a loan or leasing.

    1. That is generally the best option but unfortunately not always something that all can do.

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