Car advice: From insurance to the effective annual interest rate, what you should consider when replacing your car or when buying for financing

When buying car financing, always pay close attention to the total costs and not to a monthly repayment. Often, monthly or weekly repayments can mask an expensive deal. Always compare loans and financing using the Annual Percentage Rate (APR) – this is essentially the true cost of borrowing as it includes interest and fees. The lower the APR, the better the financing. Keep in mind that a longer repayment period reduces the monthly payment but increases your overall costs. So negotiate the highest monthly payment you can comfortably afford, as a higher monthly payment will get you out of debt faster.

What is the deal with car financing?

Will changing vehicles affect my insurance?

Changing your car will likely affect your insurance. Therefore, determine the additional costs in advance. Compare other insurers online to get the best deal. The more offers you get, the better your chance of finding the cheapest one. However, remember to compare all insurance offers on a comparable basis – some may offer roadside assistance as an optional extra. For others it will come with the policy so check those details.

Then what about the running costs?

Calculate exactly how much you will spend on petrol, diesel or electricity, because that way you can plan better. Don’t forget to also include expenses like road tax, parking and the NCT.

What do I need to know about the tires?

Replacing tires is an expensive and necessary feature of car ownership, so it’s important to know the age of the tires on the car you’re buying. A tire that is six years old is a ‘Pass Advisory’ item on the NCT, so you should consider changing it at this point and certainly do so when it’s older. Buy the best tires you can afford. Don’t skimp.

top tip

There is a four-digit code on the sidewall of your tire, e.g. 1120. The first two digits of the number represent the week of production throughout the year, while the second two digits represent the year of manufacture. So 1120 here refers to the 11th week of the year 2020.

How much does a car service cost?

Maintenance is an essential part of car ownership; Regular service won’t prevent your car from breaking down, but it will help reduce the risk. Shop around to get a good idea of ​​what a full service costs as prices can vary wildly.

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Fry Electronics Team

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