When it comes to buying a new car, the easy part might be choosing the one that meets you and your family’s needs. Finding a way to finance the purchase might prove more problematic.
To help you secure the appropriate car finance, therefore, the following are a few tips and suggestions.
A car finance agreement is typically a long-term commitment — commonly spread over as long as 60 months or 5 years.
When deciding how much to borrow — in other words, how much you are able to repay each month — it is therefore important to take into account not just that you are able to afford the repayments now, but also several years down the road.
Avoiding unmanageable debt in the future is something to avoid, so you might want to take the online “debt test” compiled by the BBC.
When buying a car, you are typically asked to put down a deposit before paying the balance through any finance agreement. A deposit helps to give the lender some security on your repaying the loan and enables you to reduce the cost of the car finance itself — the bigger the deposit you are able to afford, the less you need to borrow.
At CarFinancePlus, though, we are able to arrange no-deposit loans if there is a need for such an arrangement — and the rate of interest is still likely to remain competitive.
Whilst you are still on the forecourt, looking over a car you might be interested in buying, the dealer is almost certain to offer you credit terms for the purchase. Although it might be tempting to arrange your car finance on the spot, without further ado, you might find yourself choosing a relatively expensive option. You might not have had the time to check out the cost of alternative forms of finance.
By using an independent finance broker such as ourselves here at CarFinancePlus, however, you may rest assured that a thorough search for the most competitive deals is going to made on your behalf. Only when you are entirely happy with the price of the quote and terms of the loan do you need to make any formal agreement.
If you have a less than healthy credit rating or if you received county court judgments, or made Individual Voluntary Arrangements (IVAs) or even been declared bankrupt in the past, you may still qualify for car finance.
In these circumstances, however, you are more than ever likely to need the services of an independent broker to identify those lenders prepared to make an agreement with those who have a poor credit record.
If you continue to experience difficulty in raising the car finance you need, you might want to consider so-called “guarantor finance”, where a financially secure friend of relative offers to guarantee the repayments on the loan if you fail to do so.
Note that if you fail to keep up the repayments on the agreement, it may typically affect your guarantor’s credit file.