Getting a car finance deal is a really exciting time. It gives you more negotiation power and can give you more options when it comes to getting the car you want.
Many people, use car finance to get a better car than they would with cash. This also means you can usually get a newer and more reliable car for your budget.
A car loan allows you to spread the cost of getting a car into affordable monthly payments over a number of years. However, there are a few ways in which you can prepare before you start applying for finance. You don’t want to be paying more than you need to when it comes to financing a car and there are a few factors you should consider.
5 incredible Ways To get a Quality Car Finance Deal
1. Increase your credit score
Unfortunately, car finance won’t ever be available to everyone. From a lender’s point of view, they want to know how you can pay back your loan and how you’ve handled your repayments in the past. In order to assess your creditworthiness, lenders usually perform a credit check to see how you’ve handled credit in the past.
Having a lower credit score can lower your acceptance rates and higher interest rates. You should try to get your credit score in the best position possible before you get a car in finance to help save you money.
2. Budget
When it comes to getting any sort of loan or finance, budget everything! You should consider how much you can afford to pay for finance each month by looking at your income and outgoings.
Lenders may also do this for you through an affordability check. This is where they request bank statements from you to determine how much you could afford. Car finance is a legal agreement where you commit to paying your chosen amount each month over a number of years to fund a car purchase.
This means it’s important that you know you can meet all repayments on time and in full throughout the agreement.
3. Save up for a deposit
Whilst there are many no deposit car finance deals available it can be beneficial to save up for a deposit before you start applying. Putting more in for your car finance agreement means you don’t have to borrow as much from the lender. This can reduce the loan amount and also help to reduce your monthly payments. Deposits could also increase your acceptance rates as it shows good financial responsibility.
4. Types of cars in finance
When it comes to actually choosing the car, it can seem like a minefield. However, it doesn’t have to be. You may have your dream car in mind, or you may be open to exploring a few options.
Your budget will be a good indicator of which cars you can choose from too. Nowadays, you can get deals on electric cars, both used and new, hybrid vehicles, and automatic car finance too! If you’re unsure of which car could be right for you, you could consider test driving a few that you like or compare their running costs to see which would be the cheapest to insure and which has better fuel economy.
5. Shop around
Many people assume that car finance can only be obtained at a car dealership. It can be easier to go to a dealer and select the car you want and then get finance for it, but dealers sometimes only have a limited number of lenders. You can also get a car finance deal from a broker or directly from the lender. Brokers have access to numerous lenders and can help match you with the most suitable one for your circumstances. You’re then free to get the car you want within your financial budget from a reputable dealership. It can be worth comparing car finance quotes or getting pre-approved before you commit to one agreement.
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