Personal Finance News

The new 59 registration cars will be appearing on our roads in a little over a month and with car dealerships struggling in the current economic downturn there will be some absolute bargains to be found.

So if you're in the market for some new wheels, this could be the opportunity to pick up an excellent deal as garages up and down the country, offer massive discounts in an effort to shift some stock.

The only minor downside will be that because new car prices are tumbling, it also means that any vehicle you are looking to trade in will be worth a little less too.

However be careful not to pay over the odds for your finance in the rush to pick up your shiny new 'pride and joy'.

The garage may offer you their own finance, so you need to be aware of the sort of rates that you can get from mainstream lenders in order that you can make a comparison and to be sure you're getting the cheapest deal. It's not just the interest rate you should look at when making a comparison; make sure you check the total cost of finance which will include any additional fees or charges.

Sainsbury's Bank is currently offering loans of between £5,000 and £15,000 from a very impressive 8.1% APR Typical, plus you can apply online from the comfort of your own home, with no need to speak to anyone.

Another place to get a competitive quote for a car loan is Zopa, the increasingly popular finance provider where you can get an online decision within minutes.

Wherever you decide, make sure you submit your application before you visit your car dealership so that you know for certain that the finance is available to you before you see the car of your dreams. There's nothing worse than tracking down the vehicle you really want, only to be turned down for the loan.

With the economy in such a fragile state, it makes good sense to protect your loan repayments against unemployment (and sickness), but don't be tempted to buy your Payment Protection Insurance from your lender, you can get the same cover for a fraction of the cost from an independent provider such as British Insurance.com

Moneynet.co.uk tips for financing the purchase of a new car:

• Shop around for loan and make sure you compare the total amount payable - check out the best deals here.
  
  
  
• Care re typical APR pricing - depending on the condition of your credit profile you could end up paying a far higher interest rate than advertised.
  
  
  
• If you are considering garage finance, find out if there are any penalties for early repayment of the loan and compare the total cost of finance with the total cost of a personal loan before taking the plunge.
  
  
  
• If you decide to protect your loan repayments with PPI, don't buy it from your bank or building society; check out independent providers such as British insurance for the same cover at a much lower price.
  
  
  
• If you're buying a second hand vehicle with a warranty that only lasts three or six months, you can buy some added peace of mind with your own personal cover from Warranty Direct
  
  
  
• Your loan should be repaid whilst your car is still roadworthy - don't borrow for seven years if your car is just a cheap second hand run around and only likely to last three.

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