How to get your first car as a new driver


It takes a whole lot of time, effort, and financial investment to secure your driving test pass certificate. You have to study the rules of the road and take a theory test in road signs and speed signs. You need to be able to calculate average stopping distances in different driving conditions. The theory test requires you to pass a hazard perception test to ensure that you are sufficiently alert to identify potential problems and avoid accidents where possible.

That’s when the real learning begins. You have to take numerous lessons in order to familiarise yourself with how to handle a vehicle and manoeuvre it as you please. So, it’s not all too surprising that you might want to get on the road as soon as possible once you have finally passed and are legally certified to get behind the wheel. After all, you don’t want to have invested everything for no reason at all.

Now, if you have only recently passed your test, you probably aren’t very familiar with the process of purchasing a vehicle. But not to worry. Here are a few steps that you could take in order to make the process of buying your first car as simple and hassle-free as possible.

Purchasing a vehicle

When it comes to purchasing your first car, you have various options to choose from. So, here’s a brief overview of the different means that you have available to you when it comes to actually purchasing a car.

Savings

The first option that you have on your hands is perhaps the most financially sensible. If you have been saving for years and are sat on a pile of savings big enough to purchase a car outright, this is the way to go. It means that you will only pay out the worth of the car and not a penny more.

However, this is only an option for a limited few. Very few people have sufficient savings for a purchase as large as a vehicle and hardly anyone will purchase a brand new vehicle outright. You will even require a relatively large amount of cash for a second or third hand vehicle.

If this is an option that you have available to you, make sure to be extremely careful when purchasing a vehicle in cash, especially if you are purchasing from a private seller. It will be extremely difficult to get this money back once you have left in the vehicle. So, make sure to do a test drive, have a professional check the vehicle over on your behalf, and ensure you have all of the legal documents that show you are the legal owner of the vehicle once you have paid.

Loan

The next option that you have is to take out a loan to cover the total cost of the vehicle. When you successfully take out a loan, a professional lender will deposit your requested sum of money into your bank account, and you can then use this to purchase a car outright from a dealership or a private seller.

If your credit score is good, being approved for a loan won’t be a problem. Unfortunately, many newly passed drivers are relatively young and may not have had sufficient time to build a good credit score of their own. In cases such as this, you might want to consider guarantor loans for car finance.

Guarantor loans have lower standards and expectations when it comes to an individual’s existing credit score, as long as there is someone with a good credit score who is willing to meet monthly payments if the person who has been granted the loan fails to. As long as you meet all of your payments, your guarantor will be completely financially unaffected, and you will improve your own credit score in the process.

Hire purchase

Next, let’s get onto car financing. There are two common forms of car financing agreements: hire purchase (or “HP”) and personal contract purchase (or “PCP”). Let’s start with hire purchase.

When you engage with a hire purchase agreement, you place a deposit on the vehicle that you are interested in and the dealership that you have purchased the vehicle from will then spread the remaining cost of the vehicle over monthly instalments. Essentially, you can own and use the car before you have fully paid for it.

At the end of your contract, once you have met all of your monthly payments, the car will be entirely your own. This is a great way to reduce the initial outgoings entailed in purchasing a car. Look for hire purchase deals with the smallest amount of interest attached. Poor interest rates could see you eventually paying out a lot more for the vehicle than it actually costs.

Personal contract purchase

Finally, it’s time to take a look at personal contract purchase or “PCP”. This is one of the most accessible ways to get on the road, as it is an agreement where you can use a vehicle and make smaller monthly payments than if you were to engage with something like a loan or hire purchase. However, it is also one of the most complex options. So listen carefully when taking out any PCP agreement.

Generally, you will put down a deposit on the vehicle of your choice with a dealership. Next, you will borrow a set amount of money from the dealership. This sum of money will generally be the anticipated reduction in the value of the vehicle you have chosen over the time you intend to use it. You will pay this back to the dealer in monthly instalments plus interest.

When you come to the end of your contract, you will have two options. Either you can hand the vehicle back to the dealer (meaning that you have essentially leased the vehicle and handed it back at the end), or you can make a balloon payment of the current value of the vehicle (meaning that you have leased it until this point and are now going to buy it outright).

As you can see, you have multiple options on your hands when it comes to securing your first car and taking to the roads. Hopefully, this has helped to exemplify the different choices that you can make!

** This is a collaborative post

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