How to finance buying your first car as a married couple

By Jamie Hill - 5 September 2018

WeddingsMotoring

Buying a car is a decision which shouldn’t be taken lightly, after all it may well be one of the most expensive investments you and your partner ever make, perhaps only second to owning a home and starting a family. There are also many factors to consider, such as thinking about whether your car will meet all of your daily needs, and whether you can keep up with the running costs. Finally, you also need to consider how you are going to finance your purchase, as there are a number of different options you can choose from. If you are thinking about what car you would like to buy as a newly married couple, then here are some tips on how to finance your purchase.

Buying with cash

Funding your car completely or partly with cash would be one of the cheapest ways to make your purchase, as you won’t face the same interest costs of a loan or finance agreement for the full amount. Therefore, if you can find a way to save up some money, or raise the funds (such as by asking guests to donate towards your car as a wedding gift), this would be the most cost-effective way to afford your new car.

However, if you decide that you want to buy your car outright, it is important to make sure that you have the financial security to do so, as it is wise to keep enough of your savings back to cover you in case of an emergency further down the line. If you are worried about how much of your savings you would have left over after buying your car, then it might be worth putting down a large deposit on the car, and then paying for some of the car through another means, such as a credit card or loan.

Using a loan company

There are a number of different ways you can acquire a loan. The first of which is to apply for a personal loan through a bank or building society. Personal loans are usually one of the cheapest ways to borrow money long term, plus you have the added benefit of owning the car from the start of your loan. However, the monthly repayments can sometimes be higher than other loan methods, and if you or your partner have a poor credit score, you might find it difficult to get the money you need.

Alternatively, you could get a loan through a car finance company, who will lend you the money specifically for the purchase of a car. Though the overall amount you will have to pay back is often higher than a personal loan, it can be a lot easier to obtain this form of loan if either of you have a low credit score.

Getting a peer-to-peer loan

Another option is to use peer-to-peer loaning. This could either be a friend or family member who will loan you the money for your car, or alternatively, you could obtain your loan through a site which pairs lenders with borrowers. Ideally, borrowing the money from someone you know will mean having to pay back little or no interest, whereas you will be expected to pay back interest on a loan through a lending site, and you will normally be required to have a good credit score between you.

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