Financing a used car lets you spread the payment into instalments instead of paying everything at once. It is a useful tool, but you should work out what you can afford and compare terms before you sign. These are the steps we recommend.
1. Work out how much you can pay each month
Review your income and fixed expenses and decide on an instalment you can pay without strain. Remember to add the costs of owning a car: insurance, fuel, maintenance, ITV and road tax. The loan instalment is only part of the monthly cost.
2. Decide how much you can put down
The more you pay up front, the less you will have to finance and the less interest you will pay in total. Consider how much you can contribute without being left with no emergency savings.
3. Choose the term
A long term lowers the monthly instalment but increases the total cost in interest. Look for a balance between a comfortable instalment and a reasonable final cost. Think about the age of the car too: you do not want to keep paying once the car needs major repairs.
4. Compare offers using the APR
Do not look only at the monthly instalment. Compare the APR (TAE), which includes interest and fees, as well as arrangement fees, linked insurance and early repayment conditions. Always ask for the offer in writing and give yourself time to read it.
5. Prepare your documents
It is usual to be asked for identification, proof of income (for example payslips or, if you are self-employed, a tax return) and bank details. Each lender may ask for different documents, so confirm the list with the one you choose before you start.
6. Read the contract before signing
Check the amount financed, the term, the APR, the fees and what happens if you stop paying or want to cancel early. If there are added products, such as insurance, ask whether they are compulsory or optional and how much they cost.
Common mistakes
- Looking only at the instalment and not at the total cost.
- Stretching the term longer than necessary.
- Accepting insurance or services you have not understood.
- Financing a car without having inspected it first.
Before financing, inspect the car
Financing is only one part of the purchase. Before you sign, check the car with our 10-point checklist and ask how the warranty works.
Financing at Autos Reina
At Autos Reina we help you with financing so you can choose with peace of mind. Tell us your situation and we will advise you with no obligation.
Looking for a used car in Mijas or Fuengirola?
At Autos Reina, at Camino Viejo de Coín, 28 (Mijas Costa), you will find second-hand cars with a 1-year warranty and the chance to test drive them with no obligation. Call us on 952 637 774 or get in touch. Opening hours: Monday to Friday 10:00–14:00 and 17:00–20:00; Saturday 10:00–13:30.
