Cars can be very expensive and even ones that are reasonably cheap can still cost more than many people can afford. This means that many people will use a company such as Emu.co.uk to pay for a car. It can be difficult though to work out the pros and cons and work out whether it is a good idea to do this.
If you already have a car, then whether to buy a new on is a tricky decision. If yours works well and is fairly cheap to run then you will have to decide whether you actually need a new car and whether you can justify the cost. If you have a car that is costing you a lot of money in repairs then you may decide it will be better to get a replacement than keep paying for repairs. If you have no car and need one, perhaps for work or other vital things then you may also feel that the cost is worth it.
If you have some savings, then you should see whether these will be enough to buy a car. It can be tempting to think that your savings should be kept but they will earn a lot less interest than you will pay on a car loan. It could be worth using them either to pay for it or towards it so that the loan costs less money. Many people do not consider the cost of the loan. However, it is worth calculating how much this will be. If you add up the cost of the monthly repayments and take away the sum that you borrowed, you will know how much it costs. Remember to add in any administration fees or any other charges that you have to pay to set up the loan. Once you see how much the loan costs you will be able to decide whether you think that it is worth the cost of the loan to get the car.
There are other things to consider as well as the cost of the loan. Firstly it is worth considering how much you will have to pay towards other aspects of car ownership. If you already have a car you will be well aware of the tax, insurance, MOT, servicing and repairs that tend to need doing but with a different car these may have a different cost. You may find that you have to pay more, particularly if you are getting a bigger car, a newer car or one that is sportier. Of course there is also the price of the petrol, which could go up if you have a less efficient car.
As well as all of these expenses, you have to consider that you will need to find the repayments for the loan each month. You need to make sure that you will have enough spare money available to make those repayments. If you do not then at least you will have additional fees to pay and at worst your will have your vehicle taken away. Even if you can make the repayments, it is worth considering how you will need to change your lifestyle in order to do this and whether this is something that you are prepared to do. It is also worth thinking about what might happen in the future and whether you will continue to be able to afford the repayments even if your circumstances change. In the past you could easily assume that your salary would increase over the years and you would become better off. However, these days pay rises are rare and often not in line with inflation and so costs will tend to go up but wages not so. This means that you need to be prepared to find it more difficult to manage in years to come and think about whether this is something that you will be able to cope with. You need to think about what might happen in your life during the course of the loan and whether it is something you are prepared to take on in light of this.
Also consider whether the amount you are planning on borrowing is a sensible amount or whether you should consider borrowing less money and choosing cheaper car.