9 things to consider when buying a used car through a personal loan

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When buying a used car, there are lots of factors to consider – even more so if you are taking out a loan to pay for the vehicle.

As with most big purchases, it pays to do your research and take your time, as rushing into a poor decision could cost you even more money in the future. If you’re borrowing to pay for a used car, you want to ensure you’re making a sound investment – here are a few things to consider.

1. How old is the used car? 

While buying a used, older car is invariably cheaper than buying a new model fresh from the factory, it can also have its pitfalls. Check the car’s mileage against its age – a well-used car could mean wear and tear when it comes to the engine and other parts. Older cars can also be more expensive to insure, and car tax may be higher due to the car’s emissions.

2. What other costs are there?

When taking a loan to buy a used car, you need to consider not just the cost of the vehicle, but also the cost of insuring it, tax, fuel costs and maintenance, including MOTs and services. Can you afford all of the associated costs, as well as the initial purchase?

3. How much will it cost to run?

Consider fuel economy before you buy, and consider what it will cost on a weekly or monthly basis to run the car, taking into account your commute and likely weekend usage. If you have a sizeable commute or want to spend the weekend out on long drives, you need a car with good fuel economy, or you could see your fuel costs mount up.

4. What is the car’s history?

This is the most important element of buying a used car, especially if you are seeking a loan to do so. The V5C registration document will inform you of how many previous owners the car has had, while an MOT or service history will highlight the condition of the car and flag up areas where parts may need to be replaced or the car repaired. Make sure the car has passed its MOT at a reputable garage and check the service history – a car that hasn’t been maintained well could cost you more in repairs in the long run, even if it is sold for a cheap price.

5. Are there any immediate maintenance issues?

Consider any advisory notes on the most recent MOT and what they could cost to resolve, should the car fail its next examination. Are they minor repairs or could the car need major (and costly) work?

6. What is the condition of the car?

As well as the engine, thoroughly check the condition of the car’s interior too, including the seats and carpets. Check for tears or stains that could be expensive (or impossible to remove), and check for the handbook as they can be expensive to replace. Check the outside, too – are there any scratches, dents or other marks?

7. Do you know enough to make an informed choice?

If you don’t feel too confident about car mechanics and what to look for when test driving a car, see if someone with more knowledge can accompany you. Don’t be embarrassed – it’s better to have a second opinion from someone who knows their stuff than to waste your money on a car that is riddled with problems.

8. Have you taken it for a test drive? 

Taking a car for a test drive is the best way to ensure it runs smoothly and that it is comfortable for you to drive. Just make sure that you are insured to drive it. Can you reach the pedals and controls comfortably? Will your child’s car seat fit in the back? Is the boot big enough for large items you may need to carry, such as a pram, golf clubs or camping equipment? Ensure the car is suitable for all of your needs.

9. Can I afford the loan repayments and the running costs?

If you’re borrowing money to purchase a used car, you need to ensure you can afford to repay the loan as well as pay for fuel, insurance, services and other running costs. Consider your budget carefully before taking a loan for a used car – be realistic about what you can afford to borrow and what additional costs you will have to pay as well as the loan repayments.