Question: How long should I take finance out for?

Answer: The longer the period, the greater the total cost (except for 0% finance) However, opting for a four of five year deal may mean being able to buy a more expensive car, simply because the monthly payments are more manageable.


Question: What other charges should I look out for?

Answer: Ask about the following:

• The size of any final payment
  
• Are there any extra charges at the end of the agreement?
  
• Early settlement charges
  
• Added extras like Gap insurance or payment protection insurance
  
• Remember to make sure the rate you're being quoted is the APR, not a flat rate
  
  

Question: How do I get a competitive finance deal?

Answer: Although most people only think of their bank or the dealer for finance, shopping around for a number of quotes for other finance providers can save you money. The AA recommends you compare three different options to secure a good deal in perhaps the same way you would for car or home insurance.


Question: What if I settle early?

Answer: Three quarters of all loans are paid off early, but remember that you may be charged a penalty for early payment.

Information is supplied by the AA, http://www.theaa.com/