Finance

7 Tricks To Get A Better Car Finance Deal

car loan

Buying a new car can be an intimidating affair. Not only are you committing to one of life’s more significant purchases, but it’s likely to involve choosing a vehicle that you will have for years. Before you make any hard and fast decisions, though, you need to consider how you are going to finance your hot new ride. 

Whether you want to take out a personal loan, get a lease or pay out cash, there are a few tricks you should hold up your sleeve to get a better car finance deal. Read on to find out more: 

1. Do your research

There is no better way to grab yourself the best finance deal on the market than putting in some of the leg work yourself. Researching various lenders, what they offer and what vehicle you can get for the amount of money you want to borrow will give you all you need to get started. 

What’s more, most lenders will only perform a soft search on your credit report simply to tie you to your personal information. So you can play around with the amount you would like to borrow, find out how much APR is attached to your quote and more to give you the fullest picture. 

Make sure you only borrow what you can reasonably afford to pay back each month so that you can manage your finances and avoid missed payments. 

2. Futureproof your purchase

Unless you’ve been hiding under a rock, you may have noticed the rise of the electric vehicle (EV) in recent years. Gone are the days when the Toyota Prius was at the top with its cutting edge, forward-thinking design. Now, it’s Elon Musk’s turn to dominate with Tesla, Nissan with the Leaf and the Mitsubishi Outlander P-HEV. 

With the UK government upping their game with their “Green Industrial Revolution” and rolling out an EV infrastructure to transform the roads, you’d be hard pressed to find a better deal than now. Combined with a handy “Plug-in” grant, you can apply for the government-funded discount scheme in conjunction with the most reputable dealerships nationwide. 

3. Don’t be put off with a bad credit score

Credit reports have become quite the taboo over the years. Either you have a “good” or “excellent” one, or you have a “bad” one, or have none to speak of at all. You may have struggled to get credit accepted repeatedly and have no idea why. 

Fortunately, there are a range of specialist lenders out there that offer car financing with a poor credit score. They tend to focus on your individual circumstances, such as being self-employed, having a County Court Judgement (CCJ), or having faced bankruptcy. Although they refer to the three main credit reference agencies (Experian, Equifax and TransUnion), like all lenders, they have their own system and framework in place. 

What’s more, any credit report can be built up over time – improving your score and giving you more opportunities for finance later on in life. 

4. Tighten up your credit report

Giving your credit report a once over each month will make sure that no mistakes can impact your credit score. So whether you spot an inaccurate payment from a utility bill or something that just doesn’t look right, contact the supplier, lender or company straightaway. 

If mistakes are left unattended, you can make yourself more vulnerable to identity theft and affect your chances of credit approval. 

5. Consider paying a bigger deposit

The beauty of paying a bigger deposit is that you decrease your monthly repayments and get more choice. Most loans require a 10% deposit as standard, but if you wanted to lease a car instead, you are generally expected to pay three months rent upfront.  

Just keep an eye on the fine print, and ensure you read all your terms and conditions before signing on the dotted line. You may have a cap on your mileage and will be expected to keep your car in clean, good condition. 

6. Personal loans can be cheaper 

Traditionally car finance has been predominantly handled in house at the dealership. To this day, every billboard and TV advert centred around finance will still lean on the expectations that if you want a car on finance. Then you must go and discuss your options face to face with a salesperson. Wrong. 

Personal loans are not only incredibly accessible via a broad range of lenders and banks, but they tend to be cheaper than dealership finance. They are also more flexible and can range from 1-7 years, depending on your agreement. 

Not only that, but in some cases, you can be driving away in your dream car on the same day your loan gets approved. With a personal loan, you are not tied to just buying from a dealer. You can buy a vehicle from a private seller or garage just as easily – giving you more flexibility and chances to haggle the final price down. 

7. Don’t be afraid to ask

You’ve chosen your car, you’re all ready to sign on the dotted line, but there are still a few things that you haven’t checked out:

  • Warranty: make sure you establish what is included within your warranty. Is there a mileage cap? How long are you covered for? 
  • Early repayments: some finance deals will let you end your contract early with a final lump sum
  • Servicing: if included, you could save yourself a lot of time and money at the garage

Beyond the basics, booking in a test drive is highly recommended. That way, you can get a feel for your new car on the road – how it handles, how well it accelerates and brakes, and how accessible it is for your needs. If anything doesn’t seem right or there is an odd smell, surface damage, too much rev and more, this isn’t the car for you. 

Once you have completed a test drive, you may be able to haggle down the price with the seller, especially if something slightly amiss but something you could ultimately live with. 

Getting the best finance deals around is as easy as a few clicks. So what will be your next ride? 

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