Getting car finance for the first time can be confusing and can seem like a minefield. Alternatively, you could have taken out car finance in the past and looking to get the best deal possible. But how you can you make sure you get the deal that’s right for you and get the car you want? Refused Car Finance explains how you can negotiate your finance deal and make sure you’re getting a good deal!
Check your credit
Before applying for any type of loan or finance, you should always check your credit first before you do anything. If you are applying for bad credit car finance then you probably already know that you’ve had some trouble in the past meeting your repayment deadline, but not all hope is lost! When you check your credit file, you should make sure that all your information is accurate and up to date and ask your credit referencing agency who provided your credit file to fix any mistakes or update any information. If you’re worried about bad credit holding you back, you could consider increasing your credit score prior to a car finance application.
Clear your debts
If you do want to get yourself into the best position possible position before you apply for car finance, you should consider clearing any existing debts you have before taking on anymore. You should also pay back any payment son time and in full each month to show lenders that you are a responsible borrower. Ultimately, lenders just want confidence that you can be trusted to pay back your loan on time and in full. You can apply for car finance with bad credit, but you may be offered slightly higher interest rates compared to those with good credit. This is because you are seen as more of a risk to a lender.
Save up for a deposit
Having a deposit to put down for car finance can make you more desirable to a finance lender. Putting down a deposit for a hire purchase car finance deal means that you don’t have to borrow as much from a lender and shows good financial responsibility. Having a bigger deposit to put down can lower your monthly payments and reduce your interest rate. If you need a car in a hurry and don’t have a deposit ready, there are many affordable no deposit car finance deals available too.
Keep your interest low and term short
Low monthly payments can be very attractive, but it doesn’t necessarily mean that you are getting the best deal possible. Spreading the cost over 4-5 years can reduce the monthly fee, but it increases the amount of interest you will pay overall. This period is a long time to keep the same car too so if you like changing your car regularly, it may not be the best decision for you. If you do have bad credit, don’t settle for a finance deal with an extortionate interest rate. Using a bad credit car finance broker such as Refused Car Finance can help you get an affordable rate and a car within your budget.
Don’t be scared to visit different dealerships and settle for the first offer you get. You could also use a car finance broker to help you. Finance brokers are essentially the middleman between you and the lender. They take your application to a wide range of lenders and help you get the best deal possible for your circumstances! If you are applying with multiple car finance companies for quotes, you should stick to soft search credit checks only. Multiple hard searches in a short space of time can negatively impact your score as it looks like you are desperate for credit. Finance companies should make you aware before they are going to perform hard search on your credit file. If you’re not sure, don’t be afraid to ask!