Buying a car? How we have funded this purchase?

Buying a car?

Sometimes things happen in life and you need some help, with help I am referring to financial help. Maybe you have a kind relative that might lend you some cash or maybe you have some savings you can dip into? Or maybe like me you don’t have these options available? Sometimes it might be a significant chunk of money needed, what happens then?

We have been in this situation where we have needed a large chunk of money and we didn’t have these suggested options open to us.

A new baby arrives

Back in 2012 we had our third baby Jack. A third baby ended up costing us a significant amount of money, much more money than baby no1 or baby no 2, I wrote here about the essentials you need with a new baby. We were to have 3 children aged 5,3 and baby and after investigations into car seats realised that our car was not big enough to fit 3 car seats in the back seat. This was a time critical matter and an essential that required a solution quickly.

We did our research and worked out the best car was a Ford S-max and hubby did a fantastic job at finding a great priced showroom pre-registered (we were going to be the second owners despite car only having 50 miles on the clock) car. The list price was £26k but we managed to find one 70 miles away for £20k. A huge saving that that we were happy with.

Car was bought

We did a part exchange deal with our existing car which put 6k towards the car. We also used some money from savings of 8k. This left us with an 6k balance. We could have taken a car loan from the dealership but the interest rate was high so instead we chose to source our own loan to cover off the remaining balance. We knew that we could afford the repayments over 3 years. Back then I was on maternity leave and was to return to a well-paid job so all was well with the loan repayments.

Sometimes a loan is the only option and in this situation, it made sense. The interest rate was low, lower than we could have got from the car dealership and it meant that we had a safe and sensible car with plenty of room for the boys.

5 years on the car still goes strong, it was a sensible investment for a car. Buying it nearly new has meant we have spent little money on it with repairs. It also means that at 5 years old we still have a car in great condition and are not needing to replace the car with a newer model. The investment upfront has paid off now with a car that we own 100%.

If you are thinking of getting a loan please ensure that you check the terms and conditions and most importantly the interest rate and the APR. A rate at the moment of 5-6-7% is a great rate. And please ensure that the payments are affordable for the full term of the loan.

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Lynn Beattie

Aka Mrs MummyPenny

Personal Finance Expert

I write about personal finance made simple, lifestyle choices that will save you time and money, as well as products and services that offer great value.

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