Before financing a car it is essential you understand the financial aspect of your potential purchase and from this you must see that your monthly payment offer is not only affordable but also the best possible deal for you.
Buying your vehicle of choice is quite possibly the second biggest purchase you will make, following your home. So, it is not one to be taken lightly. Whilst paying for a vehicle with cash maybe ideal, for most it is not possible. Most people turn to finance to purchase a car. As this route acquires interest as you pay back over time; it is important to understand exactly what you should know before financing a car.
Understand your offer is going to be presented to you from finance lenders that will check your credit history and give you an offer based on your rate for risk. If you have a history of not paying the bills its likely you will not get an offer at all. On the other hand, if you pay all your direct debits and standing orders on time without fail, you will not only get offers but also you will get the best offers. For this reason, its essential you understand your credit score and how to improve it where you can.
1. Know Your Credit Score and How to improve it
2. Apply and Get Approved
3. Calculate your Costs
4. Take your time and decide, before saying Yes!
Know Your Credit Score and How to improve it
Whatever has happened in the past with your credit score has happened. Going forward you have opportunities to improve the score. From here on, make sure you pay all your monthly bills on time without fail. Your score will then start to improve. Every month: it will get better and better. So that when you take out future finance packages, you will get a much better offer than you can get today. That said, what happens if you want a car now? Well; Firstly, you need to check your credit score. Then where you can, improve it. You can do this by challenging the credit scoring company. I have already written articles on your credit score and how to improve them; I will list these below. They are essential and a must read.
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
What Credit Score is Needed to Buy a Car UK?
https://carfinancedeals.com/blog/179/what-credit-score-is-needed-to-buy-a-car-uk
Car Finance: Do I need a good credit history?
https://carfinancedeals.com/blog/136/car-finance-do-i-need-a-good-credit-history
Once you have read all 3 articles return back to this one and carry on reading the below. At this point, you will understand everything to do with credit scores and hopefully, you would have already got hold of your own score and started working on improving it.
Apply and Get Approved
Next would be to dip your toes into the world of car finance. You need to apply. First place to apply obviously, is here: https://carfinancedeals.com/apply
Here at Car Finance Deals; we work with a large panel of lenders and our aim is to get you the best possible deal on the market. In our opinion it is always best to get pre-approved before going to view any cars. You will already have your offer and you will then know exactly what you are going to be charged per month when viewing the cost of the vehicle. Of course, if you are declined also it will save you a lot of time messing around. So, it makes sense to apply first. Those of you that have good credit will always get offers. For those of you with poor credit I would recommend reading a recent article I have written:
Can I Apply for Car finance with Bad Credit?
https://carfinancedeals.com/blog/149/can-i-apply-for-car-finance-with-bad-credit
Calculate your Costs
You know your offer, so you can calculate the costs yourself if you so wish. Alternatively, ask us. We will give you a breakdown of costs on any vehicle you find. Most people opt for Hire Purchase (HP) when it comes to Car Finance. But it is also useful to understand what Personal Contract Purchase is (PCP) which is sometimes used on more expensive cars. As a customer that is approved, sometimes the option of PCP will be open to you as well as HP so I would recommend reading through the following articles so you can fully understand what you are choosing:
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
Take your time and decide, before saying Yes!
You have found the car you want, and it is all exciting. You want it now, but are you acting on emotions, or intelligence? If your lucky, both. However, many customers make the mistake at this point on acting with emotion. They want the car quick before it sold to someone else; and then once bought, have buyer’s remorse when they later decide they do not like it or realise the deal they got was not the best. My advice would be: Take your time. It is not good for the client, the dealership, the lender, and the brokerage to have to deal with these situations. Please, check your sums, check your deal, be happy with it and then move forward. Even if a vehicle you like is sold, another one will just be around the corner. Do not worry. Enjoy the process as much as you can but once you have made your decision, make sure you are pleased with it before singing the documents.
One more article I would suggest reading and understand before making your decision would be the one below I wrote recently. It may make you realise if finance is for you or not before taking the plunge:
Is it worth getting a Car on Finance?
https://carfinancedeals.com/blog/171/is-it-worth-getting-a-car-on-finance
Car Finance Takeaway:
What Should i Know Before Financing a Car?
Make your decision based on financial intelligence. Do not be too quick to fall in love with a car without understanding the costs involved. The financial side of your purchase is essential to understand. Your offer from a lender is coming from nothing more than a checklist of your repayment’s history. So, make this as good as you possibly can! Instead of just hunting for your dream car, instead take time to understand exactly what car finance is first, to give you the foundations to go out and find your car with the confidence that not only you can afford the repayments but are getting the absolute best deal for you at this moment.