How to pick the right car finance for you
When it comes to getting your car finance there is so much to consider. Ultimately, you want the best car at the cheapest price, but how can you ensure this happens? UK Car Finance have put together a comprehensive guide of the best way of securing the right car finance.
Table of Contents
Use a Car Finance Checker
One of the most complicated things about getting car finance is working out if you can afford the car you want. Although the cars sales price remains the same (the amount you would pay if you were to buy the car out right with cash), factors such as interest rate, deposit amount and loan term length all change the total you will pay back. It doesn’t have to be a mind field though, in fact you use this free car finance check which will show you your chances of being approved and your likely interest rate.
Get your finances in order first
Affordability is the single most important factor when it comes to getting car finance. The more you can prove you can comfortably afford to meet your repayments the bigger the chance of a lender approving you. This is because lenders want to make their money back and the smaller the risk of them losing money the better chance of them approving.
This is maybe the hardest tip on our list as will power is required! It’s all too easy to go window shopping and mentally drive around in your dream car. But sometimes you should delay getting the car you really want until you can improve your credit and affordability solutions. If you are working on your credit you can actually use your car finance loan to rebuild your score further. Pay in full and on-time month and month and you will soon find you’ve paid off your current car and can get the one you really want at a cheaper price (as better interest rate) than you thought possible.
Shop around but don’t apply around
You want to have a look at different car finance providers such as brokers, lenders, dealers and banks to find out any deals and offers around. Have a look at the representative APR being offered, this is usually displayed quite clearly on their website, but if you are struggling to locate it, it will always be shown in the footer at the bottom of the homepage. A car finance calculator will give you a good indication as to what you will be offered before you apply.
Consider putting down a deposit
Deposits are a fantastic way of lowering your monthly repayments. By putting down a deposit you are reducing the amount of credit you are taking out and as a result the total amount repayable. The credit you take out is what you pay interest on, so reducing this number as much as you can is recommended. That said, getting a deposit together isn’t easy. If putting a down payment on your car is not an option then you should consider a no deposit car finance package designed for your situation.
Ensure you meet the criteria
To get approved for finance in the UK you have to be:
At least 18 years old
Have lived in the UK for a minimum of 3 years
Are able to prove your affordability
Not be bankrupt
If you don’t meet that criteria, then you will not be able to get finance anywhere. But bear in mind that all car finance companies have unique criteria so check first.