Financing is the perfect way to buy a car you never thought you could afford, even if you don’t have a mega budget to spend. Most dealerships will offer much better financing options than a standard bank loan, as well as offering additional benefits by choosing to purchase a car with them using their own financing options.

In essence buying a car on finance is like taking out a mini loan for the cost of the vehicle. The cost of which is then repaid monthly over 24, 36, 48 or 60 months, depending on the finance agreement you make.

By spreading the cost out over such a long period you greatly increase the chances that you will be able to purchase the vehicle you truly desire, rather than having to make do with an older car simply because it was all you could afford! This includes executive and high performance cars.

This ‘loan’ commonly has an APR of anywhere from 150% to 20%, which can be a lot, especially on more expensive cars. For example a 20% APE on a car for 9000 pounds is as much as 1800 pounds, taking the total amount you pay to 10800 pounds.

However a lot of reputable dealerships are starting to offer an unbelievable 0% finance. Which means you pay no additional cost at all for taking a vehicle out on finance rather than paying the full amount upfront. A lot of dealerships offer special discounts or benefits for purchasing both a car with them as well as using their financing.

For example they may pay for part of your deposit on the car, further lowering your initial expenditure. By discussing your individual requirements with a reputable dealerships you will be offered the most cost effective and beneficial arrangements to suit your budget.

This is great news for first time buyers, or those of us who don’t just happen to have thousands of pounds sitting around! You pay no more than you normally would and yet have a fully usable car straight away. The only upfront fee is generally the deposit and some companies even pay for part of this if you choose to take out financing with them which can result in some amazing savings.

However if you choose financing with a high APR this cost can mean you are paying about hundreds or thousands of pounds on top of the standard value of the car, spread over the entire duration of the finance. This means that even though you are able to purchase a car without having to pay such a large cost up front, you are paying a lot more in the long run that if you had just brought the car outright.

However, this is not true if you purchase with 0% car finance. By choosing a 0% financing option you make the full price you end paying no more than the full price anyway. This effectively cuts the cost of buying a new car to in some cases no more than 50 pound per month, even for brand new cars.