Loans.co.uk offers its customers a Secured Car Loan with nothing to pay for the first 5 months. If you want a low repayment start car loan, they may be worth a visit.

If you have credit history problems, Welcome Car Finance  have have helped over a quarter of a million people with credit problems to enjoy affordable car financing over the past 14 years with their excellent car loans

offer fixed rate car loans at an amazing 5.8% for amounts between £5k & £20k. Car financing is rarely so cheap.

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So what are the different ways of paying for a car? Here are the most popular, with our tips on getting the best deal.

Hire purchase

You put down a deposit on the car, then pay monthly instalments over an agreed period, usually between one and five years.

This covers the price of the car, interest and extra fees. You do not own the car until the last payment is made.

For: The interest rate is sometimes lower because the car is used as security on the loan.

Against: The car belongs to you only after the final payment. Borrowers risk losing the car if they miss several payments.

Watch out for: Expensive payment protection cover, which may not be necessary if you have good work-related benefits - and is certainly cheaper elsewhere.

Tip: The showroom earns commission on the HP deal, so try to negotiate a little more off the car price.

Dealers' interest free credit

You pay a 40 or 50 per cent deposit and then a fixed monthly payment throughout the remainder of the loan period.

Sometimes you have 12-months where no payments are required, but then you have to pay off the full amount, or move on to an expensive rate of interest.

For: Potentially, a cheap way of paying off the loan.

Against: You may have to find thousands of pounds upfront for the car.

Watch out for: Many of these deals prevent you from selling the car until all payments are made.

Tip: Dealers will sometimes take your old car as part or all of the advance payment. Check that you are getting the best book price for it. If necessary, sell the car privately to raise more cash.

Personal contract purchase

PCP schemes, also called 'deferred car purchase plans', involve a smaller deposit.

Instead of paying off the whole loan, some of it is deferred for up to three years. This amount - the minimum guaranteed future value - is set at the outset. It is usually linked to a given annual mileage.

Because you are only paying off part of the interest on the loan, monthly repayments are lower. When monthly repayments end, you can pay off the minimum guaranteed future value and keep the car, trade it in for a new model, or hand it back and walk away.

For: Monthly payments are lower.

Against: You often have to pay the car’s full list price. You won’t have 'equity' in it – if you do, when it is sold the salesperson will deduct commission and expenses.

Watch out for: To keep the car, you may have to take out another loan. It may be cheaper to just take out a longer loan to pay for it. Stay within your annual mileage.

Tip: If you fancy a different make of car at the end of a PCP period, you can usually trade it in at another dealer. He pays off the finance company, you can put the money you are offered above the minimum guaranteed future value towards a car from the same dealer.

Leases

This is a long-term rental for up to three years. You insure the car but are not its registered owner.

You pick the model and lease period, then estimate the average annual mileage. The lease company calculates a monthly payment and a deposit, usually three months' rent.

The cost of a deal reflects how much the company thinks it can sell the car for at the end of the lease period. The higher the mileage, the higher are monthly payments.

For: No depreciation costs. You know exactly how much the deal will cost. When it ends, you walk away.

Against: You end up with nothing.

Watch out for: Clocking up a higher mileage than originally agreed could lead to extremely heavy charges.

Tip: Most leases can include maintenance and servicing. VAT is charged, which can make it a better deal for those running their own businesses – though not all private buyers.

Personal loans

You borrow from a bank or other lender and pay it back, including interest, in monthly instalments over a set period. The lower the APR quoted, the cheaper it is.

For: Many personal car loans are now incredibly cheap.

Against: The cheapest car loans may be secured against an asset, such as your home. The lender can seize it if you default on payments.

Watch out for: Most people repay their car loans early – avoid loans with heavy redemption penalties. Also, ask if the monthly repayment figure includes the cost of payment protection insurance. If you need it, a big if, it will always be available more cheaply elsewhere.

Tip: A loan does not have to be tied to the car. You can sell the car, use the proceeds to finance another one and keep the car  loan going.

Find the cheapest personal car loan

Mortgages

You add the cost of the car to your mortgage, simply increasing monthly payments over the home loan period.

For: Probably the cheapest rate of interest.

Against: The loan is secured against your home. The potentially long repayment period will mean big interest payments.

Watch out for: Mortgages with more expensive annual interest calculations and heavy early repayment penalties.

Tip: Consider so-called 'flexible' mortgages, which allow over- and under-payments. Or 'offset' mortgages, where the loan is linked to your bank account. Make overpayments, to bring down the debt more quickly.

Credit cards

With many card providers offering up to six months interest-free credit on both transfers and purchases, a high limit could go all the way to buying a second-hand car, sometimes even a new one.

For: Interest is paid only on outstanding debt. Minimum payments give greater flexibility.

Against: Lack of 'discipline' can mean the repayment period is extended, with more interest paid.

Watch out for: Cards with heavy penalties for seemingly trivial offences, such as paying your monthly debt one or two days late.

Tip: Use the 'car card' for that purpose only and do your spending with another one. At the end of the six-month interest-free period, apply for another card with a similar deal, transfer the debt over and start again – but keep making those monthly payments.