Car financing offers a convenient way to split up the costs of buying a car. You no longer have to part ways with a huge lump of cash in one go. Instead, you can make monthly payments over a longer period. 

It’s the simplest way of affording a new car and helps you get your hands on vehicles that may have previously seemed out of your budget. With that being said, many car owners end up paying ridiculous amounts every month. Why? Because they don’t know how to get a car finance deal with low monthly payments. 

It’s possible for everyone – and you only need to do two things: 

Increase your initial deposit

All car finance deals operate similarly. You make a deposit and then the rest of the money is calculated monthly over your pre-agreed term. The more money you deposit, the smaller your monthly payments will be as there’s less of the car’s value to pay off. 

So, how can you increase your initial deposit? Aside from saving for longer, we’ve got a couple of ideas: 

Look for finance offers from dealers

It’s highly common for some dealers to provide finance offers that help you get a bigger deposit. For instance, we’ve heard that Volkswagen finance often comes with a chunk of money from the dealer. Renault does the same as well, and it means the dealer contributes some money on top of your deposit. Instead of, say, having a £3000 deposit, they add £1500 on top to make it £4500. 

Sell your old car

Another obvious idea is to sell your car to the dealer. You can trade it in and use the money to put a deposit down. Again, this gives an extra couple of thousand, which easily takes anywhere between £50-£150 off the monthly payments. 

Decrease your annual mileage

Car finance offers typically involve three things. We’ve already mentioned your deposit, and the other two are: 

rs will ramp up the cost of monthly payments if you drive frequently. 

• Annual mileage
• Contract duration

The contract duration doesn’t affect monthly costs that much. You’d think it would, but if you reduce the contract, it means the optional final payment is larger. Instead, you should focus on your annual mileage. Dealers will ramp up the cost of monthly payments if you drive frequently. 

It’s not dramatic, but agreeing to do 8,000 miles instead of 10,000 can save £20 a month, which is £240 a year. Try to spend less time driving and it will make financing even more affordable. One trick is to get in the habit of driving only when you need to. Think to yourself, could I walk there? If it only takes 20-30 minutes of walking, it doesn’t require a car journey (in good weather!). Drive less to spend less – this also saves money on fuel. 

Next time you’re engaging in car finance negotiations, focus on the two things above. Do your best to put forward the biggest deposit possible, slashing your monthly payments. Then, set your expected annual mileage as low as you can and watch the savings come in.

(collaborative posts