If you’re moving away to university soon and plan on driving in your new city, you’ll need a reliable car to help you get around. Buying a new car is a big purchase decision and you may need a little help when it comes to choosing. Luckily, there are lots of options out there, even if you don’t have the cash to make an upfront payment. We’ve teamed up with Motorparks, retailers of reliable used cars, to take you through the A-Z of cash, hire and PCP purchases.
If you’ve been dutifully saving your money
to buy a car before university, paying the full amount outright is a great
option. This way, you pay the full balance upfront, involve no finance
companies and not needing to worry about any monthly payments – just one lump
If you don’t have the cash to buy your car
upfront, hire purchase is an attractive option. Similar to PCP, you pay the
majority of your car with affordable monthly payments with HP – however there are
some differences. Again, you will need a good credit score for finance
companies to agree to loan you the money for the car. You’ll also require an
initial deposit, followed by fixed monthly payments over a period of one to
The monthly payments for hire purchase cars
are usually a little higher than the payments for PCP. This is because when you
reach the end of your agreement and all repayments have been made, unlike PCP,
there is no balloon payment to be made so that you own the vehicle. With HP,
you simply have an optional ‘purchase fee’ which ranges from 0- 200, but not
every finance company charge this – this covers the costs of transferring the
vehicle into your name. You only have the option to own the car at the end of
the agreement; the finance company owns the car until you pay the ‘option to
To finance your vehicle, you could go down
the Personal Contract Purchase route. PCP is an affordable way to pay for your
car with monthly payments that fit your budget. You will need to have a good
credit score to be accepted for finance, but if you are accepted by the finance
company, you can put down an optional initial deposit – this isn’t compulsory,
and generally, the maximum deposit is 35% of the value of the car. You’ll then
pay fixed monthly payments for around two to four years with the option to buy
the vehicle at the end of the contract.
When you do come to the end of your finance
agreement, you will have three different options. You can hand the vehicle back
with no strings attached, you can exchange your vehicle for a new one and start
a new finance agreement, or you can pay the optional final payment (the
remaining balance) and fully own the car. Some finance companies charge a small
purchase fee, but this is generally very small.
Most student accommodations have limited
parking available. Some halls provide parking space, but other student
accommodation require permits and you could be limited to parking in a tight
double-parked street. You’ll want a reliable and safe car that is compact and
able to navigate along small streets, through the local town and fit into
smaller parking spaces. Note: If you purchase a car in Maryland, your car might need to pass the Maryland State Inspection for determining vehicle safety. It would be prudent for you to keep this piece of information in mind to avoid vehicle registration failure.
Money Savings Advice
First time car buyers should know that
there are a few extra options worth looking into – this could save you money in
the long run. Warranty could save you a lot of money in minor repairs – any
issues are covered under your warranty, meaning no additional costs for you.
Gap insurance is another smart investment idea for new drivers. This insurance covers the difference in cost between what you paid for your car and the amount your insurance pays out if your car is stolen or written off in an accident. This means you won’t find yourself out of pocket if your insurance company doesn’t cover the full amount of your car. Also, if you are living in an area where winters are harsh, you might need to get insurance cover for natural disaster. You might also check out few hails repair services, to be used during an emergency. There are service providers that can fix your car dents without causing any reduction in the resale value of your car, such as Paintless Dent Repair will not affect your CarFax. Even for experienced drivers, you never know what’s around the corner – an accident might not be your fault but could still result in your car being written off. Before you sign on the dotted line, remember to check car insurance quotes, and don’t just settle on the first appealing deal that comes your way.
With research and the help of somewhere like this car insurance london brokerage company, you will be able to browse the quotes from various other providers, allowing you to truly find the plan that is the best value for money as well as the one that provides you with the most protection. Whilst this is not the most exciting part about buying a car, it is something that must be done if you want the opportunity to drive your car on the road without getting into trouble. And, definitely try to make sure that your insurance is affordable before you buy a new car too.