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  • Oct 1, 2021
  • 4 Minutes

Seven top tips for financing your dream car

Being fortunate enough to drive your dream car is one of life’s great joys but it’s also likely to be one of the more expensive purchases you will make.

As well as paying for the car itself, you will need to consider insurance, tax, running costs and repair bills before leaving the forecourt.

So, here at Volkswagen Financial Services UK, we’ve compiled seven top tips for those of you looking to finance your dream car this year – and there are a few ways to help make this dream more affordable.

Take a look… 

1. Work out your long-term plan

Consider whether you want to own the vehicle at the end of your agreement, return or lease the vehicle, swap it for a newer model, or if you need flexibility to make up your mind at a later date.

This is because, depending on what you decide at this stage, the potential outgoings for your new car may vary.

For example, if you’re looking for a finance agreement with no mileage restrictions and you want to eventually own the car outright then Hire Purchase may well suit you best. However, if you’d like to drive away in a new car regularly but don’t want the hassle of ownership, Contract Hire could be just what you’re after.

For a full breakdown of potential finance options, visit https://customer.vwfs.co.uk/car-finance-options.html   

2. Consider buying a used car

The global used car market is gigantic: more than one hundred million Volkswagen Group vehicles and even more cars of other brands are on the roads of the world, which will all change hands at some point.

According to the SMMT, used car transactions in the UK rose 108.6% from Q2 2020 to Q2 2021, with motorists turning to used cars as supply shortages continue to affect the new car market.

There are so many benefits to buying a used car. For example, used cars are much cheaper to buy than new cars and often cheaper to repair. There are usually shorter wait times once you’ve chosen the vehicle you want, too.

Just make sure that you know what you’re looking for and what you’re willing to compromise on. Don’t forget to ask for all the necessary paperwork and remember that you should always take a used car for a test drive.

For more information, visit https://customer.vwfs.co.uk/approved-used-vehicles.html

3. Can you pay with cash or savings?

Many people prefer to save up and pay for their car outright, rather than having to pay interest on a loan. If you do decide that this is the best option for you, there are a couple of things to bear in mind.

Firstly, always make sure that you have enough savings left over after you’ve paid for your car to cover any unforeseen emergencies.

If you’re buying with a credit card, this gives you the added benefit of credit card purchase protection. So even if you still plan to use savings, using this method may be the safest option. Just make sure you pay your bill in full the following month.

For more information, visit https://customer.vwfs.co.uk/approved-used-vehicles.html

4. Maximise trade-in value of your current car

If you’re looking to buy a new dream car, it might be worth considering trading in your current one to fund part of your deposit.

Simple and easy jobs such as cleaning your car, fixing minor damage and making sure your car is fully roadworthy are just some of the ways to make sure you get the maximum value when you come to trade in or sell your car.

It’s also worthwhile gathering together all your car’s paperwork, including the V5 Registration Certificate (often still called the logbook) and the most recent MOT certificate. We’d also recommend getting an independent valuation and researching second hand values to give you some idea of what kind of valuation to expect. 

5. Check your credit score

Your credit score is an assessment by a particular lender or credit reference company of how good a credit risk you are, based on its own criteria. However, a good score is no guarantee you’ll be able to borrow money, as different lenders have different criteria for choosing customers.

In the UK, there are three main companies that compile information on how well you manage credit and make your payments. They are Experian, Equifax and Callcredit.

A credit report usually holds information such as your credit accounts, public record information like County Court Judgments, and other personal and financial details.

It is possible to improve your credit score, sometimes by simply cancelling unused credit cards (there might be other steps you could take). Doing so is likely to increase your options when it comes to reliable methods of borrowing money and may speed up the process of owning your dream car. 

6. Is your dream car an electric vehicle?

A recent survey of ours found that half of British drivers (50%) want to help the planet by switching to an electric vehicle*, and if you fall into this environmentally friendly category, then read on.

Our innovative Lease&Care package is a product that’s been specifically designed for electric car drivers and alleviates the unknown costs and depreciation some consumers’ associate with purchasing an electric vehicle, allowing you to have flexibility and peace of mind when making the switch.

Lease&Care is perfect if you drive a low or moderate amount of miles each year, don't want to own the vehicle and you want to include the cost of servicing in your monthly payment.

To find out more, head to https://customer.vwfs.co.uk/car-finance-options/lease-care.html

7. Use a finance calculator

Working out your dream car budget, and then sticking to it, is a really simple way of boosting your chances of being able to afford the car of your dreams.

To discover which cars are within your reach financially, try using a finance calculator from a Volkswagen Group brand to really understand what is and isn’t possible.

You simply choose your finance product, set a monthly budget and pick the model you’d like to drive – the online calculator will do the rest by showing you what a potential finance agreement might look like. From there, you can tweak certain details until you find a deal that works best for you.


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Research sources:

*Representative survey of 2,011 UK drivers excluding those with electric vehicles (Aged 17+) carried out between 1st June 2021 and 4th June 2021 by Censuswide.

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