Buying a car - tell me how finance works, can you put it on the mortgage etc?

[theborrower]

DH and I would like to get a car. Not totally essential as we bus it to work, but we are always borrowing my parents' car for day trips and visiting the in-laws (essential for that) and it would be handy/nice to have our own.

DH and I have been crap with money in the past, and now that we're not (we don't have any debts apart from the mortage, always pay off the CC in full each month etc) we're conscious of not taking on any debt. We tell ourselves that if we can't pay cash, we shouldn't buy it.

However, a colleague told me that nearly everyone pays for a car on finance, and she put her car purchase on their mortgage.

Is it easy to do that? Is it sensible? Or should we just get a finance deal from the car people? Or a loan from the bank??

I don't have a clue how it works! Advice welcome.

if you can overpay on your mortgage surely that is the cheapest loan rate you will get? no need to pay it off over 25 years, just pay the same amount per month that you would need to pay for any loan you take out to buy a car, and it is paid off in less time than the other loan company

Thanks for all the replies, everyone! You've all been really helpful, it's good to hear your thoughts.

Cogito / 34DD - thanks for the example. Wow, you can get a ford fiesta for £125 a month? Sounds good/affordable to me! Will investigate leasing more.

TantiTowie - I've had a look at the Car Club. There are 3 cars in the area, but all are a 15-25 minute walk away. So ok if we're using it to visit the in-laws and DH can go and fetch it. Not ok if I'm on my own with the wee one(s).