Car Credit Crunch?

Financing your next car on credit can be a sensible option for those who rely on their cars for work. Being the biggest purchase most of us make after our homes, car credit is often the only choice. But can it really save you money?

Hidden savings

Obviously buying on credit does cost more than buying up front. However with interest rates performing poorly it makes little sense to dip into savings at the moment. Cars are expensive items – even second hand – so using car credit is often the only option. Using credit has a number of advantages and with interest rates remaining low it may be a cost effective way to save money in the longer term. By buying a new car on credit you can take advantage of being able to buy a better car than might otherwise be possible. The advantage to buying new over old is simple; new cars are more likely to be reliable – avoiding the need for expensive repairs over the coming years. Additionally with manufacturers’ warranties still in place – any problems that should occur will most likely not be a burden on your pocket.

Fuel savings

Modern cars are also designed with fuel efficiency in mind. Buying top of the range and new means that the fuel efficiency is likely to be extremely good and this is no insignificant matter. Fuel prices seem to be on a permanent upward curve and with uncertainty in major oil producing regions this situation is not going to improve any time soon. Buying the best, most fuel efficient car now, will ensure that you will continue to save over the car’s lifetime. Older, less fuel efficient cars will guzzle fuel happily – continuing to drain your bank balance for years to come.

Wheeling and dealing

Thanks to the financial downturn there are some good car credit deals out there. In an attempt to stimulate their sales, both manufacturers and dealers are offering plenty of extras. As with anything it pays to shop around and find a car credit deal that suits your pocket. Plenty of deals include extras such as six months road tax, which means a further saving. Don’t be afraid to haggle – car salesmen rarely are – by negotiating the right deal you will benefit now and in the future. On balance, despite our wariness of credit, car credit is one way to fund some savings in the future.


Despite the credit crises – or perhaps because of it – there are still some good deals to be found in the car credit market. Making the most of savings now and in the future buying a new car on credit can make sound economic sense.