Talk to me about buying a car please...

[ssd]

We've only paid cash before so have no clue about finance.
The cars we want have really gone up in price, I'm talking around 8k to 11k, like a 1.2 hatchback.

Can anyone explain how cars are financed these days?
I've heard of getting finance from the car dealership but that looks a rip off.

At that sort of price point you might find the cheapest option is a personal bank loan. Typical car finance is either PCP or HP and are likely to attract higher interest rates. You may also be able to get these types of finance at lower rates from specialist brokers and the finance company will then pay the dealer directly.

If you have good credit then you'll probably find a bank loan will be cheaper - the best % rates tend to when financing a brand new car.

Yes, a bank loan is the way to go. We did this last year, our car was £11000 so we had a loan for £10000 and paid with our debit card at the dealership. We have a really low interest rate spread over five years with our usual bank. Your bank will probably be more flexible with payments than a finance company.

Loan here too. I've done it twice and both times I used Money Supermarket to compare and Zopa came up with the lowest rate so I went with them for loans spread over 5 years.

If you get a bank loan you own the car instantly, if you use dealership finance car is not yours till the last payment is made. I would also ask about gap insurance if you decide to do dealership finance.

Thanks, a bank loan does sound the best.