Securing Car Finance
A guide to securing finance for your car purchase
If you’re anything like the rest of us, paying for a car with cash, up-front, is absolutely unheard of. Even if you’ve got the cash in your bank account, there’s no way you could risk emptying the vaults to pay for your new wheels.
Car loans are by far the most common way for the average person to fund the purchasing of a vehicle. Avoiding a single lump sum payment, there are various different kinds of car loans one can take out to buy a vehicle. This article has been written to advise you on the different ways of financing your car purchase.
Different sources of funding
Often, customers will finance their car purchase through the dealership itself. Although this is really fast and convenient, you won’t be able to find the best car finance rates with the dealership, as the loans are often front-loaded meaning that the interest rates will be higher in the beginning and decreasing towards the end.
Banks are a little friendlier with car loans, and they won’t try to pile on other purchases along with the car, like alarm systems and so on.
It’s advised that you avoid most online financial services, as it’s very easy to get caught in a scam.
Different interest rates
Interest rates on vehicles vary widely and have several different factors influencing them. The first thing anyone will look at is your credit rating. If you have bad credit rating and giving a loan to you is seen as risky, the interest rates will be higher.
Time is also another factor. The shorter the loan, the lower the rate will be. Also, used cars will have higher interest rates than newer ones.
Shopping around for a financing deal
The salesman’s aim is to make you excited enough to want to drive that car straight out of the dealership. Try to resist the urge, and shop around so you can get the best deal possible. You will definitely be rewarded for looking around for the best possible deal.
It helps to know exactly how much you’re going to be able to pay off each month, in addition to all of your financial outgoings, like the rent and other living costs. Perhaps you should time it with that pay rise you’re going to get in a few months.
Don’t wait until you’re at the dealership itself to do the maths. Do your homework and then approach the salesman.
Final tips to bear in mind
When you’re meeting the bank manager or the salesman at the dealership, have your full credit report with you. Remember to bear in mind how much exactly you can afford to pay, and not just on a monthly basis; you need to bear in mind the full, final figure that you’re going to end up forking out.
And finally - don’t feel sorry for the salesman!