Funding Your First Family Car

Posted on May 21 2019 - 4:59am by Ella

The average new family car costs $33,000 in America, according to KKB – that’s not the sort of spare change that you find down the side of the couch. Even if you are purchasing second hand, it is likely that you are going to need at least a few thousand dollars in order to get something that has enough space and is reliable and safe for your school runs, days out and vacations. Here are some great tips for funding your first family car.

Look at a financing package

Getting finance for your family car can help you have the funds quickly and easily. This year 85% of Americans used finance to purchase their new cars. As long as you have the means to make monthly payments, then it may be a good deal for you. Generally, lenders want you to have a credit 707 of over, although you may find some institutions or banks that will loan you the money if you have a lower score, but sometimes the interest payments are higher. Often dealerships will offer you finance if you are purchasing a car from them, but you might be able to get a better deal from a bank or credit union. Normally the finance comes in the form of a secured loan – the collateral being your new car. So if you fail to make the monthly repayments, then the finance lender will be able to take possession of your vehicle.

Leasing your car

If you take out a car lease, you are basically renting the vehicle from the company that you acquire it from. They will then ask you to agree to buy it from them for a certain price after a set period of time, or alternatively, take out a new lease. It’s not an ideal situation, however, it may suit your family if you don’t have a lump sum to spend on a car.

Pay with savings and buy pre-owned

Cars will generally lose a staggering 18% of their value in the first year and half their value in three years, so you may find that you can get a really good deal buying a pre-owned car. If you are able to pay for your vehicle with savings, it means that you are not paying anybody interest. The car will be entirely yours, without any terms and conditions. You’ll just need to pay for insurance, gas, and repairs, which could potentially work out to be expensive, particularly when it comes to your insurance. As such, it will be important that you take the time to shop around for a list of car insurance brokers who can point you in the direction of the cheapest plans and providers on the market, thus leaving you with more money to pay for your gas and any emergency repairs that may need completing. Once this has been done though, you will have better peace of mind.

Buying your first family car is a big financial commitment. It will open up a whole new world of great family trips out and vacations that everyone will enjoy.