Martin Lewis car finance advice is trusted by millions in the UK to help save money and make smart vehicle-buying choices. Whether you’re buying your first car or upgrading, this guide breaks down Martin Lewis’ top tips for car finance in 2024-2025. Let’s explore how to avoid debt traps, find fair deals, and stay safe in a tricky market.
Who Is Martin Lewis?
Martin Lewis is a money-saving expert and founder of MoneySavingExpert.com. He’s famous for giving honest, easy-to-understand advice on topics like bills, loans, and car finance. His tips focus on helping everyday people avoid wasting money, especially when borrowing or signing contracts.
What Is Car Finance?
Car finance is a way to borrow money to buy a car. Instead of paying the full price upfront, you make monthly payments. There are three main types:
- Personal Contract Purchase (PCP): Pay monthly, then choose to keep the car, return it, or trade it in after a few years.
- Hire Purchase (HP): Pay monthly until you own the car outright.
- Personal Loan: Borrow money from a bank to buy the car, then repay the loan.
Car finance can be helpful, but Martin Lewis warns it’s easy to overspend if you’re not careful.
Martin Lewis’ Top Car Finance Tips for 2024-2025
Here are Martin Lewis’ key tips for getting car finance right:
Check If You Can Afford It
Before signing anything, ask:
- Can I afford the monthly payments even if my income drops?
- Have I budgeted for insurance, fuel, and repairs?
Martin Lewis says never stretch your budget just to get a fancier car. Stick to what’s realistic.
Compare Interest Rates
Car finance deals come with interest (extra money you pay to borrow). In 2024, interest rates are higher due to inflation, so shop around! Use comparison websites like MoneySavingExpert’s Loan Calculator to find the cheapest option.
Avoid “Buy Now, Pay Later” Traps
Some dealers offer “0% interest” deals, but Martin Lewis warns these often have hidden fees. Always read the small print.
Don’t Rush
Dealers might pressure you to sign quickly. Take your time. Sleep on big decisions and talk to someone you trust.
Consider a Used Car
New cars lose value fast. Martin Lewis suggests buying a used car (2–3 years old) to save thousands.
Car Finance Mistakes to Avoid
Based on Martin Lewis’ warnings:
- Ignoring the Total Cost: Focus on the total amount you’ll repay, not just monthly payments.
- Overestimating Mileage: PCP deals limit how many miles you can drive. Go over, and you’ll pay extra.
- Forgetting the Balloon Payment: With PCP, a big final payment is due if you want to keep the car. Plan for it.
What’s New in 2024-2025?
- Stricter Rules: The UK’s Financial Conduct Authority (FCA) now forces lenders to check if you can truly afford repayments.
- Electric Car Deals: More discounts on electric cars to meet climate goals. Martin Lewis says check grants and tax breaks.
- Scams Rise: Fake car finance offers on social media are up. Always verify lenders through official sites.
How to Spot a Car Finance Scam
Martin Lewis’ team reports these red flags:
- Emails or texts saying “You’re approved!” without you applying.
- Dealers asking for upfront fees via gift cards or crypto.
- Websites with spelling errors or no contact details.
Alternatives to Car Finance
If car finance feels too risky, Martin Lewis has some helpful tips. First, consider buying a cheaper car and saving up over time. Put aside the same amount of money each month that you would have spent on car payments and later, use that savings to buy a car outright. Second, if you already have savings, it’s better to use that money to buy a car without taking a loan. This way, you avoid paying extra in interest and can own the car outright from the start. These strategies can help you stay financially secure while still getting the car you need.
Martin Lewis’ Best Picks for 2024
If you have a low credit score, MSE’s Credit Club can help you find loans that are tailored to your credit history, making it easier to get approved. For comparing different loan options quickly, websites like “Money Super Market” or “Compare The Market” are great tools they let you check rates and offers in just a few minutes. These resources can help you find the best loan for your needs without wasting time.
What to Do If You’re Struggling
If you can’t make payments:
- Contact the Lender: They might adjust your plan.
- Get Free Debt Advice: Use charities like StepChange or Citizens Advice.
- Avoid Rolling Over Debt: Martin Lewis says never take a new loan to pay an old one, it digs a deeper hole.
Conclusion
Following Martin Lewis car finance tips can save you stress and cash. Always compare deals, read contracts, and ask questions. Cars lose value, but good decisions last forever.
FAQs
Is car finance a good idea?
It depends. If you can afford repayments and need a car now, yes. But buying used with savings is cheaper long-term.
Does Martin Lewis recommend PCP?
He says PCP can work if you understand the final “balloon payment,” but warns it’s easy to overspend.
Can I cancel car finance?
Yes, but you’ll pay a fee. Under the “cooling-off period,” you have 14 days to cancel most agreements.
