A Guide to Slainte Vehicle Finance Solutions
Buying your first car is a significant milestone. With all the choices out there, it can be hard to know where to start. Before you go out and fall in love with a car, there are some things you should consider.
What Costs Should You Budget For?
The first thing you need to do before you even start to look at cars is to figure out what your budget is. How much can you afford to spend per month on your car? How much money do you have for a deposit?
This figure needs to cover the cost of the car. Unless you can afford to buy the car outright, you will be making monthly payments on it. However, your budget also needs to cover the road tax, insurance, fuel, MOT (if the car is over three years old) and maintenance costs.
The amount of road tax you will pay depends on the type of fuel and the size of the car. If you select an electric vehicle, then there will be no road tax. There is also no road tax for vehicles built before 1973, but the running costs for these cars make them a poor choice for a first car.
Once your car is over three years old, you need to get it an MOT every year. You will need to do this before you can get it taxed. It would be best if you also planned to get your car serviced every year to make sure you keep on top of the maintenance. It will help you to catch things like wear on your tyres before it gets too bad.
Tip: Some Dealerships will offer you service packages as part of your purchase. This can be better value than paying when you need them. For new cars, not getting a service may invalidate the warranty.
Which Cars Are Good For New Drivers?
When it comes to picking the exact car, there are a few main factors to consider, these are; insurance group, brand and features.
The insurance group of the car will determine how expensive it is to insure your car. New drivers and those under the age of 25 will find insurance is very expensive. You will also see a steeper increase in costs are you go up the vehicle insurance brackets. Generally speaking, you should look for cars that are cheap to repair and have smaller engines, as this will put them into a lower insurance group.
The brand of the car is mostly a matter of personal preference. Some people have very strong opinions about car brands. If you don’t, then don’t worry about it. There aren’t any really bad ones out there as they all have to meet specific safety and economy standards.
The last, and perhaps most important thing to think about is what features do you need. Do you need a five-door car? Do you need something with great miles to the gallon? Is an electric or a hybrid can an option for you; could you charge it easily? Do you need to be able to fit a certain amount of luggage in the back? Do you want the best safety features going?
Once you have all of these things in mind, you can start looking to see which cars tick all the boxes.
Tip: Try and decide with your head and not your heart. Cars can be expensive to run, and the novelty can wear off fast.
Should You Buy Used or New?
Ultimately this is up to you. There is something very tempting about buying a brand new car. But, you should be aware that the moment you drive the car off the lot, it loses around 10% of its value. It then loses about 20% of its value every year for the next five years. This can mean that the amount you owe for a loan to buy the car can be more than the car is worth.
There are real advantages to buying a new car. For example, you can get the exact specifications that you want. Your car will also have the most up to date technology and safety features.
If you care about the resale value of your car, and not losing out financially, then you should look at used cars. If you want the best technology and have exacting needs, then a new car will be the better choice.
Tip: Nearly new cars, such as demo cars can be a good compromise. They have more modern features but don’t have the same price tag.
What Should You Check For If You Are Buying a Used Car?
When you’re buying a used car, you need to take a little more time to check the vehicle over; you want to make sure no nasty surprises are waiting for you. Here are some key things to look for;
Mileage – On average, the mileage for a car is 10,000 miles per year. If the car you are looking at has something wildly different than this, ask why.
Take a test drive – Make sure you drive the car. This gives you a chance to feel how responsive the breaks and steering are, and how easily it changes gear. Don’t forget to try reversing the car as well, to make sure that everything works the way it should.
Try the gadgets – Make sure to try out all the features the car is supposed to have. If it has rear sensors, make sure they work. Try the radio, the heated seats, the GPS, etc. Check the tyres have enough tread and that all the lights are working.
Service history – Ask to see the service history and MOT. Ideally, the car should have a full-service history, showing it has been maintained every year. If there are any gaps, then you should expect the price to be much lower.
Tip: Some used car dealers will offer warranties on their used cars which can give you peace of mind.
Should You Haggle?
When it comes to buying a car, you should expect to haggle. Most dealers can be flexible on the price of the car. When they can’t move on the cost of the vehicle, you should ask about getting something extra thrown in. This could be a spare tyre or a deal on a service plan.
Before you talk to the dealer, do your homework. Check how much you should be paying. Make an offer at the lower end of the range you found. If you can’t get a price you’re happy with then walk away. It’s not worth overpaying for a car, you will regret it later.
Tip: Be polite, friendly and charming, and you’ll get a better deal. If the dealer likes you, they’ll do more for you.
Car Finance Jargon Buster
There are lots of different ways to get yourself a car. Personal contract hire is a method that allows you to have a car without owning it. It gets called a range of different things depending on where you look. You may see it referred to as a personal lease or simply as leasing. Leasing is very common in the US and is beginning to grow in popularity in the UK too.
What Exactly Is Personal Contract Hire?
Personal Contract hire is basically an agreement where you pay monthly for the use of a new car. You are basically renting it for a set amount of time. At the end of the contract, you give the vehicle back. Because you are not working towards owning the car, personal contract hire tends to have relatively low monthly payments.
Tip: Because you will not own the car at the end, this can be an expensive form of car finance. However, it is also one of the cheapest ways to get into a new car, especially top range models.
How Does Personal Contract Hire Work?
In a lot of ways, personal contract hire works a lot like renting a property. You start by paying a deposit. The deposit is usually the equivalent of around six months of payments. You then pay a set amount each month for an agreed period of time. Contracts are usually for one to four years although if you shop around you may find different options. Generally speaking, going for a longer-term contract will give you smaller monthly payments.
Once you have selected your car and got all the extras that you want, you will have to pay a processing fee. This is typically in the range of £150-£200.
As part of your contract, you will agree on a milage for the term of the contract. Take care when you agree to the limit as you will have to pay a fee for every mile you go over the agreed limit.
Some leasing deals will also include road tax and break down cover. If you are lucky, you might be able to get servicing included as well.
Tip: Check to see if the price includes VAT or not. A lot of these deals are aimed at businesses so the quote may exclude VAT.
What Happens At The End Of The Contract?
When the lease ends, there are two options. You can either return the car or you can extend your lease.
If you decide to hand the car back, then it will be checked over. As long as it is in good condition and you have not gone over the agreed mileage then there will be nothing more to pay. There will be a fee for every mile you go over the limit. This is usually somewhere between 5p and 10p per mile. However, for more expensive cars this fee can be even higher. If the vehicle is not in good enough condition to be sold then you may have to pay for repairs to any dents or scratches.
Tip: If you are interested in extending your lease, contact the finance company a couple of months before the end of the contract. You may be able to negotiate a lower monthly fee, as the car is now older.
What If You Want To Get Out Of The Agreement Early?
It will depend on your contract. In most cases, you will have the option to pay a termination fee to return the car before you get to the end of the lease. The size of the payment will probably depend on how much of the lease is left. The earlier you try to terminate, the higher the fee will be.
Tip: If you just stop paying it will affect your credit score. Try to plan out your finances, so you don’t have to pay to end the contract earlier.
What Are The Benefits Of Personal Contract Hire?
- This is the cheapest way to get access to a car, especially for top-end models.
- You don’t have to worry about road tax or breakdown cover.
- The car will be covered by the manufacturer’s warranty for the whole of the time you have it.
- The whole thing is very simple. You pay a single monthly fee to use the car and then hand it back at the end.
- You don’t have to worry about depreciation when you drive the car off.
- If you have a VAT registered business, you can claim the car as an expense and reclaim half of the VAT.
What Are The Negatives Of Personal Contract Hire?
- At no point will you own the car. You will also never have the option to buy the car.
- Even though you are putting money in every month, you will have nothing to show for it at the end of the contract term.
- If you have an accident and the car is written off, you may end up having to pay a fee to the finance company. This is to cover the difference between how much the insurance company and the finance company will value the car at.
- You have to be careful about your milage as you will have to pay if you go over the agreed limit.
- You have to pay extra to get exactly what you want.
Where Can You Get A Personal Contract Hire?
There are two options for finding a personal contract hire deal. You can arrange a contract directly at some dealerships. Not all dealerships offer this option as it is not widely used in the UK yet. The other option is to go through an online broker.
When you look for an online broker, make sure that they will work with private individuals as some will only work with businesses. The broker will match you to a leasing company who will buy the car. The broker will deliver the car once you make your first payment.
Tip: Take some time to look for average prices from a couple of online brokers before you talk to a dealership. That way you know if you’re getting a good deal or not.
When it comes time to buying a car you are offered a lot of different options to pay for it. One of the methods that had been around the longest is Hire Purchase. It is a way to spread the cost over your car over time. Around 20% of vehicles are bought this way. Before you decide if Hire Purchase is the right option for you here are the key points.
What Exactly Is Hire Purchase?
As the name suggests, Hire Purchase is a system where you essentially hire the car and then have the option to buy it at the end of the term. This means that until you make your final payment, the finance company owns the car. Only when the last payment is made do you own the vehicle. This means that the car is used to secure the loan. If you miss a payment, the finance company can repossess the vehicle.
Tip: If you choose this option, you can’t sell the car until you have paid the final payment. So choose your finance period with care.
How Does Hire Purchase Work?
You make a deposit to secure the car, usually around 10%, but it can vary. The finance company agrees a time period with you, to pay the remaining cost of the car. Remember that you will also be paying interest on this amount. You then make monthly payments for the agreed time. At the end of the period, you pay a final fee and take ownership of the car.
If you are buying a car that costs £15,000 and agree a three-year term with 5% APR and a £200 final purchase fee.
You pay an initial deposit of 10% – £1,500
You make monthly payments of £403.93, over three years – £14,541.48
Then make a final payment of £200 to take ownership of the car.
You will pay a total of £16,241.48
Tip: Dealers will often offer low or 0% APR agreements, however, to be eligible for these you may need to make a much larger initial deposit.
What If You Want To Get Out Of The Agreement Early?
If you find that you no longer need the car, or you just can’t afford it anymore, then there is a way to get out of the agreement before the end of the term. If you have paid off half of the original loan then you can return the car at the end of the agreement. If you haven’t yet paid off half the amount but still need to return the car, you will have to pay off the remaining amount to reach the halfway point.
To leave the contract early, you should make sure that the car is in good repair. If there are any maintenance or repair costs linked to the vehicle, you will be expected to pay those.
Tip: If you do leave the agreement early make sure to keep all the paperwork, so you can prove you haven’t just defaulted on the loan.
What Are The Benefits Of Hire Purchase?
- The terms are often highly flexible. You can choose a deposit and repayment term to suit you.
- Some dealers will make a contribution to your deposit if you opt for Hire Purchase.
- There are some 0% APR deals out there.
- The cost of the car is spread out, so you don’t need the whole amount upfront.
- As the loan is secured against the car, you might be eligible for Hire Purchase even if you have been declined for other types of loan.
- If the car is faulty, it is the finance company’s responsibility to fix it.
Tip: The rate you are offered will depend on your credit score, the better you score, the lower the rate.
What Are The Negatives Of Hire Purchase?
- You don’t own the car until the end, so you can’t sell it before the term expires.
- The monthly payments and APR are often higher than other finance options.
- You can’t make any modifications to the car until the end of the term.
- If you miss a payment, the finance company can take your car.
Tip: Some online companies offer Hire Purchase deals, which may be better for you than getting it through the dealership.
Is Hire Purchase Right For You?
Hire purchase is, in most cases, the more expensive finance option. However, it is the right choice in a number of situations.
If you have a poor credit score and would be unable to get a standard car loan, then Hire Purchase is a good alternative. This is because the car is the security for the loan. The finance company don’t do as deep of a credit check because there is less risk for them.
If you can get a 0% deal, then Hire Purchase becomes a good choice. You can generally only get these deals if you have a large deposit. But this can allow you to spread the cost a little without paying for the credit.
If you are likely to want to change your car sooner than the agreed term then this is not a good choice. You might end up paying more to get out of the contract and be left with nothing to show for it.
Tip: Making payments towards your Hire Purchase agreement will have a positive impact on your credit score.
Whether you’re looking to take your motorhome out for weekends away or perhaps are looking for a home away from home for an extended break as you drive through Europe, motorhomes can bring so much flexibility to every trip. But, before you buy a motorhome, make sure to read our guide, so you make the right decision for your needs.
What Different Types Of Motorhome Are There?
Motorhomes come in a wide range of designs and styles. Here are just a few of the types you might find in your search
A-Class Motorhomes – These are the top end motorhomes. They are well thought out and come with all the newest features. They can be huge, and some even have their own garages so you can bring along a second small car, or a motorbike inside the motor home.
Overcap Bed Motorhomes – These are very distinctive and easy to spot. You can see the moulding extends over the cab. This has space for a double bed. These motorhomes are very popular with families, and they have good resale value.
Rising Roof Campervans – These have a roof space that you can put up when you set up camp. This allows you to have a shorter vehicle while you are driving around, which can make parking a lot easier. They are compact enough that you can easily drive them every day.
Tip: If you can, rent a motorhome similar to the one you are thinking of buying. This will give you a chance to try it out before you commit to buying it.
What Should You Consider When You Are Looking At A Motorhome?
As you are trying out and looking at a motorhome, there are some questions you should ask yourself. The first one is about storage. Is there enough for your needs, and is it where you want it? As you look around think about where you would put all your things. Will it work for you?
Are all the beds comfortable? The only way to know is to try them out. Try all of the beds and lie in them for a little while. This will give you a real idea of if you will be happy to sleep in them.
Does the kitchen have everything you need? Do you need a shower and a toilet? Ultimately it would be best if you thought about what you plan to do in your motorhome and try it out before you buy. Remember, toilet and show facilities will need emptying, which can be very unpleasant. If you plan only to visit campsites with facilities then you may not need bathroom facilities on board.
Tip: Having a shower in a motorhome can be a big selling point. But, make sure you try getting into it to see if it is actually useable for you.
What Driving License Do You Need To Drive A Motorhome?
If you got your license before 1997, then you may be able to drive any size motorhome with no limitations. If you got your license after 1997 then your standard license allows you to drive anything up to 3.5 tonnes. Some of the bigger motorhomes have weights that exceed this amount. Make sure to check the weights before you fall in love. The category code you need to check is C1 for loads between 3.5 and 7.5 tonnes. Category C is for motorhomes with a weight of over 7.5 tonnes.
Tip: If you have a newer license but want to drive a larger motorhome, then you can take an additional driving test. This will allow you to drive or tow loads of up to 7 tonnes.
Does The Time Of Year Affect The Price?
The busiest times for buying motorhomes is between April and September. If you buy outside of these times, then you are more likely to be able to haggle for a good deal. The end of the camping season is also a good time to catch some discounts. Dealers need to clear the old stock to make room for the new models. This can be a chance to bag a bargain.
Tip: The end of summer is the time when prices start to fall.
Should You Buy A New Or Used Motorhome?
There are benefits to both options here. A brand new motor home will have the most modern features, both for driving and living. You can get exactly what you want, and you know that your motorhome has the manufacturer’s warranty behind it.
Buying a used motorhome offers you a good value proposition. Since motorhomes, like cars, lose around 20% of their value as soon as you drive them off the lot, buying a used one means you don’t have to suffer this loss. A used campervan has already been stress-tested, if there were any kinks then they already have been worked out.
It really is a matter of preference and budget. There is no wrong choice here either option can work for you.
Tip: Motorhome Shows can be a great place to find and try out new motorhomes.
What Should You Check For In A Used Motorhome?
You should make a point of checking the condition of the tyres on a used motorhome. Because they are not an everyday vehicle, the tread is probably fine. However, infrequent use can lead to cracks developing in the tyre walls. You would expect the tyres to be changed no more than four years ago, even if the tread looks fine.
You should expect to be provided will the full documentation for the vehicle. This should include the owners manual and a full service history.
Make a point to check for any signs of damp. Because motorhomes are often taken to a variety of climates, they are at higher risk for damage to seals. This can allow water to get in. Signs of damp include stains, mould and the distinctive ‘damp smell’.
Tip: When you are looking at the service records for a used motorhome, make sure that the living quarters were also serviced. There are gas and electrical systems that need maintenance.
To provide you with a home away from home for any travels you undertake, a caravan is a great choice for those who like to get away, but still want to experience their home comforts. So, before you buy a caravan, read on for our expert guide of what you need to know about caravans before you buy.
What Are The Different Types Of Caravan?
If you are new to the world of caravans, then you might be surprised by just how many different types there are out there. Here are just a few of the most common.
Conventional Caravan – Most caravans have just one axle. They range in size from 3m – 6.5m. They sleep between 2 – 6 people. Most have some sort of washroom, with a toilet and basin as a minimum, most also have showers. Most caravans will have a kitchen area with a hob and work surfaces.
Twin Axle Caravans – These are bigger caravans that have a second axle for stability. This makes them easier to tow, but harder to manoeuvre.
Folding Caravans – These are full-size caravans that fold down into small trailers for towing. They are more effort as you have to put them up each time you set up camp, but they are much easier to tow and store.
Teardrop Caravans – These are super tiny caravans, they can be towed by small sports cars and even some motorbikes. Typically they have only space for a double bed, and perhaps some cooking facilities.
Tip: Get inside and try out as many different caravans as you can before you make a decision. There are so many options out there that you might miss out on your perfect caravan if you just stick with the first one you try.
What Are The Most Important Considerations To Keep In Mind When Choosing A Caravan?
The most important thing to bear in mind when picking out your caravan is weight. You need to select a caravan that your car can tow. This is a matter of weight. To know if you can tow a caravan, you first need to know the ‘kerb weight’ of your car. This is how much it weighs when empty.
Ideally, the caravan you pick should weigh less than 85% of the kerb weight of your car. This would make it easy to tow. If it weighs between 85% – 100% of the kerb weight of your vehicle then you can tow it, but it can be more difficult, meaning only experienced caravanners should attempt it. You should never try to tow a caravan that weighs more than the kerb weight of the car.
The other thing to consider is the total length of your car and the caravan when hitched together. This length must be less than 7 metres.
These are all key aspects to think about whether you plan to buy a new car or use your existing vehicle.
Tip: Most caravans have a plate near the door frame that tells you the fully ladened wight of the caravan – the MTPLM.
Does The Time Of Year Affect The Price?
The time of year has a significant impact on the price of caravans. You are likely to get the best deal at the end of the camping season. This is true for both new and secondhand models. For a new caravan, the prices tend to drop because the dealers need to clear space for the new models which tend to arrive in autumn. Once the prices have dropped, then you may find that you can haggle for a much better deal.
Tip: The best deals are usually found at the end of summer.
What Extras Should You Budget For?
There are a few things that you can buy that will really make you caravan experience more enjoyable. Just remember to consider the price of these when thinking about your budget.
- Adding an awning can double the space you have to live in.
- TV, some caravans have built-in TVs if yours does not then you might want to get one.
- A caravan step can make getting in and out of your van a lot easier.
- A leisure battery is a must-have for any caravaner.
Tip: Many dealers will have second-hand awnings for sale. They may even be willing to throw them in with you caravan as an extra.
Should You Buy A New Or Used Caravan?
It’s really a matter of personal preference. The newer caravans will have more features. But you will be able to get a better price on an older caravan. Like cars, caravans depreciate the moment you drive them off the lot. For your first caravan, it can be a good idea to get the cheapest one that you feel happy with, that way you can find out if it really is for you before you spend too much money.
Tip: Older caravans can be an excellent buy. Look out for how they have been stored; if the owner stored the caravan well, it is likely to be in good condition.
Should You Buy A Used Caravan From A Private Owner Or A Dealership?
Buying from a private dealer has a lot of advantages. Perhaps the biggest is that you can get a warranty for the caravan. You will also know that it will have to have undergone its safety checks and it should have had the gas systems checked before you take ownership. Buying from a dealer means that if you get stuck or have problems, then it is easy to go back to them for advice and guidance.
Buying from a private seller mostly offers you the chance to save money. Privately sold caravans are generally around 20% cheaper. It also gives you the opportunity to see first hand how the caravan has been stored. This will provide you with some great insight into whether the caravan is in good nick or not.
Tip: If you do buy from a private seller, you don’t have the same legal protection. If the caravan is not quite as advertised, you have no legal recourse.
What Should You Check For In A Used Caravan?
The biggest killer of caravans is damp. So if you are looking at a used caravan you should make a point to look and smell for any signs of damp. Staining, mould and softening wall panels are all signs that there might be a damp problem.
When buying a used caravan, you should make sure that all the documents are available with the van. You should expect to see manuals for the electrical, water and gas systems, the owners manual, and a full service history.
Tip: If you can, plan to try out the caravan at a site near the seller. That way if there is a problem, you can find it early and get it dealt with.
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