We have all done, visited a car dealership at the weekend and seen that lovely little two seater sports car you have been drooling over since you were a teenager.  You walk round it, opening the doors, stroking the smooth shiny paintwork and breath in that new car smell.  Then you have a heart attack when you see the on the road (OTR) price!

Buying a new car is the second biggest purchase in your life after a home.  Normally I would not recommend buying new due to depreciation, but to be fair to my future guide on buying used cars this guide must be written.  Now unless you are fortunate enough to have liquid cash lying around you are likely to be buying your new car with some finance.  The question is what type of finance?  This guide aims to explain the various types available and whats best.

Hire Purchase Most dealers will offer this as an option for purchasing a car.  A finance company offering the HP will own the car and the consumer will buy it from them over a set period of time.  The consumer will need to put down a deposit of 10-20% but this means lower monthly repayments over financing the whole car.  The consumer will not own the car until the HP company has been repaid in full, and during this period the car can not be sold.

Personal Contract Purchase The consumer agrees to lease the car for a set period of time, for a set mileage.  For example 3 years at no more than 10,000 miles a year.  If you go over the set mileage the you may end up being charged.  The consumer pays a fixed monthly sum over the lease period. Service, maintenance and repair are included in the monthly payments.  Compared to HP the monthly payments are low, but you will never own the car unless at the end of the term you agree to pay the guaranteed future value.  This is calculated at the start of the term and is fixed.  If the actual value of the car at the end of the term is less than the GFV then as a consumer you loose out, if it’s worth more you can use the difference as the deposit on your next car.  If you don’t want the car at the end of the term you can simply hand the keys back and walk away.

Unsecured Loan A Consumer will borrow money from a bank, building society or finance company based on their income and what they can afford to repay.  The annual percentage rate (APR) and monthly payments are fixed, and the loan is paid back over a fixed term.  As the loan is not secured on the car you own the car from day one and can sell it at any time, but you must pay off the loan within the agreed term.  If you do repay the loan early there may be an early repayment charge.  Some companies offer flexible loans allowing you to take payment breaks without incurring a fee.

Secured Loan A Consumer will borrow money from a bank, building society or finance company and the money will be secured against an item of value i.e. the new car or the consumers house.  The annual percentage rate (APR) and monthly payments are fixed, and the loan is paid back over a fixed term.  Usually the monthly payments for a secured loan are less, you can also have longer repayment terms.  If the loan is secured on your car, you must repay the loan before you are able to sell the car.

Now I explained the 4 most common methods for financing your next new car which is best?  I would certainly rule out PCP if you are planning to hang onto the car.  At the end of the term in most cases you will end up paying anywhere upto 20% more than the market value for the car, as the dealers GFV is usually set in their favour.  So in my opinion PCP is one most expensive finance options.

HP is usually open to most consumers but as such it attracts high APR’s which may not be suitable for your circumstances.  HP is particularly attractive to those consumers who get turned down for secured and unsecured loans.  Once again in the long run HP will cost the consumer more than other finance options.

Unsecured and secured loans from banks or building societies are in my opinion the best way to finance a new car.  Simply apply for the money take it to the dealer and pay the cash.  This makes you a Cash Buyer and as such puts you in a strong negotiating position.  You then simply repay the loan over a fixed term at a fixed rate using monthly payments.  Remember to hunt around for the best rates though, typically 5-8% APR from the high street lenders.  Don’t be enticed by the dealer offering unsecured and secured loans, the rates will be high and you won’t be able to negotiate much on the price.

There are many different mortgages out there, at last count there were circa 2000 products on the market from UK banks, building societies and other financial organisations.  With this many around it can be hard to choose which is best for you.

To start you need to have an understanding of the different types of mortgage available.  It is important to remember though, depending on your particular financial status you may be restricted on what products are available to you from lenders.  Once you have chosen your type of mortgage you can look at the different products available.

Repayment.  This is the traditional type of mortgage and the only type that guarantees you will own your home (assuming you keep up with the repayments).  The mortgage debt is split over a number years, usually 25.  Each month you make a payment you are paying off interest and capital.  In the first few years you are going to be primarily paying off the interest, but as the term shortens then more and more capital will be paid off.  The repayments continue until the debt is repaid.

Interest Only.  As the name suggests you are simply repaying the interest on the mortgage debt over the agreed term.  Then at the end of the term you will need to pay the capital back to the lender.  If you are unable to do this then the lender will probably reposses your property.  This is why it is important to have a method to pay of the capital at the end of the term and don’t just rely on winning the Lottery!  Methods that are available are, Endowment, ISA’s or Pension Plans.  Endowments are stock market based investments, which were very popular in the 1980’s and 1990’s when oversized mobiles, Shoulder pads, red trouser braces and whale tail Porsche 911’s were all the rage.  Then it went BANG!  Endowments are now considered very bad and like red trouser braces & shoulder pads should be avoided at all costs!  It is possible to cash in a pension plan to repay debt, but once again not a good idea.  Overall if this is the route you want to take then setup an ISA to repay the capital.  This is a tax free investment that is ideal for saving.  More info on ISA’s in our savings section.

So by now you should have chosen which type of mortgage you would like.  It now gets complicated with the numerous products available.  As previoulsy stated depending on your financial status not all of these products will be available to you.  In our next article we will look at some of the best products currently available and what a mortgage really costs…

As you know there is no such thing as a free lunch, but there is such a thing as a heavily discounted meal.  You just need to know where to look.

Restaurant homepages.  Most big chain restaurants have homepages on the Internet, and on these pages you may find sections where you can sign up free for newsletters or member clubs.  This is where they then post their deals such as 2for1 etc…  A good example is Wagamama’s

Vouchers.  From time to time the big chains will print vouchers in the national press.  But if you don’t read the national press where can you get the vouchers from?  The Internet is your answer and here are some of the best sites for vouchers:-

• Vouchercodes.co.uk
• Latestdiscountvouchers.co.uk
• VoucherSeeker

If you find any great voucher sites you want to share please email the Admin Team.

Complain.  You have to be very careful here, as complaining could end with you being chucked out of restaurant and never allowed back.  Only complain if there is something to complain about, and never send food back unless you want to insult the chef.  Food arriving late or very bad service can result in huge discounts on your bill but do not push for them.  Polite complainers are rewarded the best as they would want to welcome you back, angry rude complainers will be ushered out quickly and without much discount as they certainly do not want you back upsetting staff and customers.

Loyalty.  See if the restaurant offers a scheme to reward customer loyalty.  For example visit 10 times and your 11th meal is free.  A good example of this is Nandos.