5 finance offers too good to miss

24/08/10

Buying a car is exciting. Bothering about the loan you need and whether you can afford it is a bore. Trouble is, writes Ray Castle of motors.co.uk, one depends on the other: getting the money right is pretty important.
If you don’t, you could end up paying hundreds of pounds more than you need. Don’t worry, though, because we’ve scouted around to bring you the best deals, whether you’re buying a new car or a second-hand one.

Peugeot’s Just Add Fuel
308 1.4 Millesim 5dr
On the road, new: £16,245
Initial rental £2078, then 35 monthly payments of £265. 9.9 APR.
What Peugeot’s done here is gathered together the main fixed costs of running a car – finance costs, comprehensive insurance, road tax, and breakdown rescue – and rounded them up into a single payment. The scheme’s available on most Peugeots and here we’ve chosen the 308 Millesim, one of a range produced to mark Peugeot’s 200th anniversary. It’s based on the entry-model 308 and costs the same but adds alloy wheels, fog lamps and a sports body kit. The package is available as a lease (as shown here) or as a personal contract purchase (PCP).

With a lease, you simply hand the car back at the end. With a PCP you can do this, too, or you can go on to buy the car. You can also hand it back and take another car on another PCP.

Before you sign for Just Add Fuel, though, check the small print. First, be aware that items such as tyres and brake pads are excluded – so it’s likely that you’ll pay to replace them at some point over the three years that this plan runs. Second, the payment shown here depends on an annual mileage of 6666 miles. Travel further and you’ll pay a surcharge. And finally, note that although ‘road tax’ is included, what actually happens is the dealer gives you a cheque when you get the car to pay for the second and third years of tax (at current rates). If the cost of road tax rises, you’ll pay the increase.

Citroen C3 range
On the road, new: £10,990-£16,440
0% loan with £0 deposit, plus 3yrs servicing at no extra cost.
This is good value if you want a new car but would rather not use any of your cash as a deposit. Bundled with the servicing offer, it’ll save you £2000 or more, depending on model, on what you’d pay if you borrowed the buying price for from a bank and paid a garage for scheduled maintenance.

Any new or second-hand car, costing £8000
Borrow that much for £221 monthly over three years, 8.8 APR
If you borrow from the bank, this is cheap as it gets. At the moment Sainsbury’s Bank, Alliance and Leicester and Santander offer identical deals at this rate. With each, you’ll face a charge if you decide to repay the loan early but there are no set-up or administration fees (as charged with many loans). In all, you’ll pay £951 interest.
Bank loans like these are a good bet because you’re not tied to buying any car and there’s no worries over mileage limits or other conditions hidden in the small print. And, unlike hire-purchase and PCPs, you own the car from the start.

Fiat i-deal
500C 1.2 Pop
On the road, new: £12,465
Deposit £1867, then 36 monthly payments of £169, 3.1 APR
With interest at a third of the best rates offered by banks (see above), this offer – on the open-top 500, currently Fiat’s most desirable car – delivers strong value. You’ll pay a little under £500 in interest overall. As the name suggests, this deal is available from Fiat’s web site (www.fiat.co.uk). It’s a PCP, so after three years you have the option simply to hand the car back, to buy it outright, or to swap it for another new Fiat. Whichever you pick, you’ll pay extra if you allow the car’s mileage to creep above 10,000 a year but that’s a sensible limit and the excess is charged at a reasonable 6p per mile. If you decide to buy outright, though, be aware that the £5274 you’ll hand over includes a £285 option to purchase fee. Such charges are usual with PCPs – but this is heavier than most.

Vauxhall Meriva 1.4 SE (a/c)
On the road, new: £15,495
Deposit (30%): £4699, £299 monthly over three years.
0% finance. Another good deal that saves you £2000 or more over the typical cost of borrowing from a bank. And because it’s a straightforward loan, you end the car outright once you’ve made the final payment. The Meriva’s a sharp buy because it is a new design and it benefits, too, from Vauxhall’s new deal that offers a lifetime/100,000 miles cover on engine, drivetrain and other key components.

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