Before I start, I’d like to stress that I am in no way a finance expert and that entering into a financial agreement is a big decision that must be considered carefully. This post is purely to share the things I learned during the process and how I found the whole experience.
Choosing my car
I’d never bought a brand new car before, so I have to admit when I walked into Eden Vauxhall the first time, I was pretty excited.
I initially wanted a Vauxhall Corsa, for a few different reasons:
- I’ve driven a few in the past (as hire cars) and I always found them comfortable and nice to drive
- Friends of ours recently bought their car from Eden and had a really good experience
- From the research I did I found that Vauxhall did some good 0% finance deals (more on that later)
In the end I went for a Vauxhall Adam Energised, which is smaller and a bit funkier than the Corsa.
Dave and I used to share one car, which worked fine when I walked or got the train to work. However, when I got my new job I realised I would need to drive, hence the need for a second car.
Our other car is quite big and where we’re moving to is a bit tight on parking, so it actually made sense to get a smaller car. I do sometimes miss having 5 doors, but on the whole I’m really happy with my new little car. It’s cheap to run, looks cute and gets me where I need to go – plus it has something called City Mode, which is AMAZING for parking in tight spaces.
Was it scary going car shopping?
Not at all! The staff at Eden were so friendly and I always felt very well taken care of. The showroom was spacious, modern and very comfortable, so while I had to do a wee bit of waiting around, I was able to do so on comfy sofas, with plenty of magazines and all the free coffee I could drink!
Jennie, the saleswoman that helped me, was lovely – very warm, helpful and professional, without being too pushy or sales-y.
She answered all my questions, talked me through the features and benefits of the car and took me on a test drive so I could get a feel for it.
Is car finance confusing?
It was a bit at first, but I made sure I did lots of research as I wanted to go in knowing what sort of deal I was looking for. I think this was a good idea as it helped me feel more prepared and sound like I knew roughly what I was talking about! Obviously you can ask questions and they’ll be more than happy to explain things, but it’s nice to have a basic understanding going in.
Can you explain a bit about car finance?
There are various different ways to finance your purchase, but the two main terms you’ll hear being thrown around are PCP and HP. Both are summed up very briefly below:
Personal Contract Purchase (PCP)
- Flexible terms, low monthly payments (instalments only cover the partial cost of your car)
- Low deposit required
- At the end of your agreement you will need to pay a large chunk (or balloon payment) for the car to be yours
- If you aren’t bothered about owning the car you can return it to the dealership or part exchange the car on a new finance agreement
- Mileage restrictions apply, with penalties for exceeding them. You will also be penalised for damage to the car (beyond general wear and tear)
- This type of finance is best suited to people who aren’t bothered about owning the car at the end. So, if you’re the type of person who likes swapping cars and having a brand-new one every few years, this could be a good option for you
- You’ll hear the term ‘Guaranteed Future Value’ – more on this here
Hire Purchase (HP)
- Once you’ve made your final payment you will own the car
- Rather than smaller monthly payments followed by a large balloon payment at the end, your agreement will be made up of larger fixed monthly payments
- You can vary the size of your deposit. The more you’re able to put down, the smaller your monthly payments will be
What about interest rates?
Interest (APR) rates vary and it is possible to find 0% interest deals, which is what I did. Quite simply this means my monthly payments are worked out as follows:
[Retail price of car + any extras (I’ll come to this later) – deposit] % by the number of months my contract runs for (48, in case you were wondering)
And that’s it, no interest is added on.
I added on floor mats (they weren’t included), GAP Insurance (I would recommend having this – more info here, and exterior paint and alloy protection. There were other options, such as upholstery protection, that I decided not to go for. Don’t worry – when you come to buy, the dealer will run through all your options and their benefits.
If you’re planning to buy a car and either don’t wish to purchase from a private seller or don’t have the funds to buy outright, you’ll want to start exploring finance options. The points I’ve mentioned here are very brief, but Creditplus* have a mine of information on the various types.
What I have learned though, is that buying a new car needn’t be scary or overwhelming. It’s a big purchase, but there is plenty of advice available to help you make the right choice. I’m really happy with my new car and had a great experience with the team at Eden.
I should say as well that I went for a brand new car because of the various perks that come with doing that, but finance is available on used and even classic cars, so your options aren’t limited!
*Disclaimer: Creditplus is my employer but all thoughts and opinions are my own and I received no additional financial incentive for writing this post.