Auto advice: From insurance to APRs, what to consider when replacing your car or buying on finance
Published on 4 September, 2022
Overview
From car finance to insurance and running costs, it’s worth looking at these details before signing on the dotted line at the dealer
What’s the deal with car finance?
When it comes to buying on car finance always look closely at the total cost rather than a monthly repayment. Often monthly or weekly repayments can conceal an expensive deal. Always compare loans and finance by annual percentage rate (APR) — this essentially is the real cost of borrowing money because it includes interest and charges. The lower the APR, the better the finance deal. Remember a longer repayment period reduces the monthly payment, but it’ll drive up your total cost so negotiate for the highest monthly payment you can comfortably afford as a higher monthly payment will get you out of debt faster.
Will changing my car affect my insurance?
Changing your car is likely to have an effect on your insurance so determine the extra costs in advance. Compare other insurers online for the best deal. The more quotes you get, the better your chance of finding the cheapest one. Remember to compare all insurance quotes on a like-for-like basis though — some may offer breakdown cover as an optional extra. For others it will come with the policy so check these details.
What about running costs then?
Work out exactly how much you are going to spend on petrol, diesel or electricity as this will allow you to plan better. Don’t forget also to include costs such as motor tax, parking and the NCT.
What do I need to know about the tyres?
Replacing tyres is a costly and necessary feature of owning a car so it’s important to know the age of the tyres on the car you are buying. A tyre that is six years old is a “pass advisory” item at the NCT so you should consider changing them at this point and certainly do if they are any older. Buy the best tyres you can afford. Don’t skimp.
Top Tip
On the sidewall of your tyre is a four-digit code, eg 1120. The first two digits of the number represent the week of production during the year while the second two digits represent the year of manufacture. So 1120 here refers to week 11 of the year 2020.
How much does a car service cost?
Servicing is an integral part of car ownership; a regular service won’t prevent your car breaking down, but it’ll help to reduce the risk. Shop around to get a good idea of what a full service will cost as prices can vary wildly.
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