Getting a car on finance is a big decision to make. After all; it is likely to be your second most expensive purchase. With most new vehicle purchases in the UK currently funded on finance; you are left wondering is Car Finance worth it? It is something you are likely considering because you are here reading this; so let’s jump in – Is it worth getting a Car on Finance?
The answer is both Yes and No; depending on your financial situation. Not only with what savings you have but also; your ability to earn money with those savings. If you will make more money buying a car outright than what you can make by investing your savings, then maybe Finance is not for you. That said, investments rarely come with a guaranteed return; and I believe finance is a straightforward solution that is offered to enable you to achieve the product you want at a reasonable price. This may explain why it is such a widespread solution for buying vehicles and yes; your credit score will affect whether finance is a good choice for you. I might add; your credit history maybe the deciding factor on whether you can obtain finance at all.
Finance of course also will enable you to purchase a car you might not of otherwise been able to afford. This is also a strong point. However, I would still think sensibly about your purchase. It is likely, you will get a car and be over the moon with it for the first few months. Over time, the monthly repayment might start to get you down. You don’t want to put your lifestyle at risk by stretching your budget too far and you certainly want to make sure you get the best suitable deal for yourself.
What kind of Car Finance Deal will be most appropriate for me?
There are several types of Car Finance available and some will be more positive to your circumstances that others. There are several key factors to consider so let’s have a look at these.
Where do you want to buy your Car?
So you have a choice. Other websites, not naming names, give you wrong information at this point. You can get a car on finance from almost any car dealership in the UK. So, the choice is there. This is an extraordinarily strong point. With the internet now you can live in London and buy a Car in Scotland. You can collect the vehicle yourself or have it delivered. Such services are available today.
You also may have a choice of HP (Hire Purchase), LP (Lease Purchase), PCP (Personal Contract Purchase), and Leasing. Now I will not cover these different types of options in this article however in general they all require you to pay a certain amount every month to the finance lender. Presuming you do get offered finance I would suggest asking your finance brokerage (in this case, us) on what deals you have been offered. You might only have been offered HP. If your credit score is strong then you might be offered multiple options. Whatever you have been offered make sure you choose the best deal available to you from a financial point of view. I will link here below other articles that are relevant to this paragraph that I have just wrote;
BUYING A CAR THROUGH HIRE PURCHASE: HP EXPLAINED: https://carfinancedeals.com/blog/78/buying-a-car-through-hire-purchase-hp-explained
BUYING A CAR THROUGH PERSONAL CONTRACT PURCHASE: PCP EXPLAINED: https://carfinancedeals.com/blog/87/buying-a-car-through-personal-contract-purchase-pcp-explained
CAR FINANCE: DO I NEED A GOOD CREDIT HISTORY?: https://carfinancedeals.com/blog/136/car-finance-do-i-need-a-good-credit-history
HOW TO IMPROVE YOUR CREDIT SCORE: BUST MYTHS & IMPROVE YOUR RATING: https://carfinancedeals.com/blog/104/how-to-improve-your-credit-score-bust-myths–improve-your-rating
Also what can make a difference in your decision is how much deposit you can put down. Usually this will not be mandatory, and maybe you will be better off keeping your monies for your own investments (or having for a rainy day.) That said, some people want to keep their monthly payments as low as possible and putting a deposit down will reduce them for sure. Ask your brokerage (us) how much your monthly repayments will be if you were to put a deposit down that you can afford.
Check your Budget
Which brings us to this; how much you can afford. Your budget is an important aspect when considering finance – work out what you can afford in terms of monthly repayments. Extending your loan over a long term (e.g. 5 years instead of 3) will reduce your monthly outgoings to a reasonable affordable level. This will mean you will be paying more in total interest over the life of the deal, but still an extremely popular option. 5 Years (60 months) is standard and most selected choice by CarFinanceDeals.com customers.
Your Credit History
The final aspect, and maybe the most overlooked, is if you will be approved for finance at all. Lenders want to minimise risk, and so they should. If you have a record of not being responsible with your money, then why should a lender borrow you anything at all? They will not, and you will be left without a finance option. The more responsible you are (e.g. Paying your bills on time every month without fail) then the more likely you will be offered more products as a finance solution and furthermore; you will highly likely obtain better rates because of this. Better rates equal less in monthly payments and less in total interest. So, you see; it pays to be responsible with your money.
Conclusion; Is it worth getting a Car on Finance?
The answer to the question is based on your own circumstance. First you need to be approved for finance. To do this you need to apply for Car Finance. Secondly you need to consider your options, e.g. What financial packages you have been offered from the lender. Then compare these offerings with your budget and whether you will put down a deposit or not. Then you should have your financial figures written down that will enable you to make an educated decision based on the best offer for you.
Your starting point is to apply now and you can do this with us here at Car Finance Deals by clicking this link: https://carfinancedeals.com/apply