Finding the Best Car Finance Deal

Gaining finance for a new car is a big decision; there many options available and making the wrong choice can often leave you with a great deal of debt. However, with the right research car finance can be a very useful and necessary tool.  It is said that a new car is the second most expensive item you will ever pay for after your home.

When Should You Consider Car Finance?

1. Paying for a car in cash is perfect if you can afford it; but the truth is most of us just don’t have the disposable income to fork out such a huge lump sum for a car. Car finance can spread out this cost and leave you paying affordable instalments whilst enjoying you new car within a day of application (or less!).


2. If your car is written off or fails its service there is often period of distress; we need a car to commute to work and sometimes the insurer cannot provide a cover vehicle. Suddenly we need a lump sum of cash to pay for a replacement vehicle. This is where finance can help.


3. Financing a car will often allow you to afford a make/model that you normally couldn’t afford up front. Allowing you to enjoy a more comfortable and reliable vehicle whilst spreading the cost over time.


4. Boost your credit score! Paying off your car finance will boost or rebuild your credit score; this very useful if you’re looking to secure a mortgage any time soon!

Consider Your Options

There many companies out there dedicated to providing car finance but the simple truth is that you are more likely to receive a generous interest rate from your bank. Alternatively you could consider a loan from a family member which will likely save you a great deal of money in the long run.

If you can’t convince the bank (or the wealthy uncle) then many car finance companies are happy to give out loans to individuals with bad credit. Before you strike a deal, make sure you are aware of all of the costs including processing fees, instalments and additional interest. Only go ahead if you are confident that you can comfortably pay back all of the instalments for the entire period.

Top Tips to Save Money on Car Finance

• Arrange a shorter repayment period
  
  
  
  • A long term loan will have a much higher interest rate than short term loan. If you can afford to pay it off quicker, do it!

• Negotiate the car price prior to gaining finance
  
  
  
  • Dealers are often willing to sell for much lower than the price tag. If you can haggle before getting your loan, you can ensure that you aren’t paying interest on money you don’t need!


• Shop around
  
  
  
  • There is always a better deal! Finding a car finance that suits your situation is vital to keeping your costs down; take some time and do your research!


• Try some new options!
  
  
  
  • Get a few quotes and change some information each time; try a different car, a different repayment period and different lump sum. It’s surprising how on small change can save you a great deal of money!