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Buying a new car
12:36pm Thursday 12th April 2012 in Lloyds TSB Commercial Finance Advertorial Content
If you’ve been waiting for the new 12-reg number plates, it could be time to buy your new car.
It’s more expensive than buying a second-hand car, so you might need to think about taking out a loan to afford it.
If you’re 18 years or over and already have a Lloyds TSB account, you could borrow up to £25,000 for between 1 and 7 years to pay for your new car.
A car loan from Lloyds TSB is an unsecured personal loan, and how much you’ll be able to borrow depends on your individual circumstances such as your ability to pay the loan back and your credit history.
Buying your new car If you need to take out a loan to buy your car, first make sure you can afford it.
Once you’ve taken out a loan, you’ll need to pay it back in monthly instalments. These are calculated over the term of your loan and take into account the interest that builds up on the money.
This is calculated using the APR (Annual Percentage Rate) – the annual rate of interest you’ll pay on your loan – and it means you’ll always pay back more than you’ve borrowed.
If you’re registered for Internet Banking with Lloyds TSB you can work out exactly how much you can borrow and how you’ll pay it back each month using their handy loan calculator.
The value of your car It’s always nice to have a new car but before you rush off to the forecourt it’s important to remember it will drop in value. As soon as you drive it away the car will be worth much less than what you paid for it.
The amount of depreciation will depend on exactly what type of car you buy but a new car loses up to 65% of its value in the first 3 years. Smaller, city cars tend to lose less in value than bigger, more expensive cars but they’ll both drop in price as soon as you drive them away.
Make sure you take account of this when you’re planning your finances. If you’re planning to sell in a few years time, check how much your car is likely to be worth. How much does it cost to run? Another important factor when choosing a new car is how much you’ll end up paying to keep the car on the road while you’ve got it.
It’s now a lot easier to work this out, thanks to the UK Fuel Economy label – a new initiative that gives you an indication of running costs and the environmental impact of new cars.
All cars are rated on a scale from A-G, depending on their CO² emissions in g/km. Cars rated A have the lowest emissions and G have the highest.
It also gives you the estimated fuel costs for 12,000 miles and the cost of 12 months’ vehicle tax.
This is a great way of helping you work out whether you can afford to run the car.
Ready to buy your new car? Apply for a loan from Lloyds TSB