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Car Finance Gap Insurance Car Finance Gap Insurance Borrow Less Money or Take a Shorter Term Car Loan? It can be easy to concentrate mainly on the monthly payment when buying a new car, and to ignore the term for which you are committed to make the payments. Car loans over 5 years can look to be fairly cheap. But have you worked out how much it is really going to cost you in total? Before you buy a new car, ask the salesman to work out various options for you - say a 12 months loan, 2 years, 3 years. Experiment with the option of paying a larger deposit. Do the maths, as they say. A little time spent working it out now could save a lot of trouble in the future. If you can borrow as little as possible, it naturally follows that you will need to pay less. It can be a mistake to compensate for big car finance charges by spreading them over a long period. Car finance is very expensive money. It all has to be paid back sooner or later. Spreading it out over a longer term just gives the car finance company the chance to keep charging you interest for longer. Car finance should not be seen as "easy money". It is money that you owe. The more you borrow and the longer you borrow it for, the more it will cost you. Before you commit, you may wish to take a cool look at the car you are buying. Can you manage with a lesser vehicle? Do you really need all those cc's? Are those accessories essential? If you can start to cut back on the initial vehicle costs, if you can borrow less over a shorter period, and if you can make other economies, you will pay less in the long run - guaranteed! Do remember that 5 years is a long time. All sorts of things could happen in that time. What you can afford now is not necessarily what you can afford in 3/4/5 years time. Always have a contingency plan, and make sure that you have the reserves to tide you over if times get hard. Insurance is essential and you can find links on this site that will help to protect you. Gap Insurance

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