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Car Finance – Finding The Right Lender

Author: John Smith  //  Category: Car Finance

Car Finance – Finding The Right Lender

Are you looking to buy a car, but not sure how to finance it? Well, the good new is that there are plenty of lenders out there with a vast array of offers. However, you’ll need to do your homework before signing on that dotted line and driving your shiny new car away. Otherwise, you’re unlikely to get the best deal on car finance. So what are your options when it comes to finding a lender?

The Bank of Mum and Dad

It’s a bit of a cheeky option, but you may find that your family is willing to help you out with your car finance, especially if they have easy access to cash sitting in a low-interest account where inflation is eating it away. If you’re going to borrow money from family sources, draw up an agreement that you can all work to and make sure you stick to it. Offer to pay interest on top of the loan to make it worthwhile for your family lender and to sweeten the deal.

Garage Forecourt Deals

Beware with these, as they tend to be the most expensive kind of finance deals and often will have APRs comparable to a credit card. This is because car dealerships know that many customers will turn up to a showroom without finance in place, see something they like and be persuaded to buy it. Never be swayed by the usual lure of low monthly payments. Look at the underlying APR and the total sum you’d be repaying over the loan period. This is usually enough in itself to make you look elsewhere! The important thing is not to bow to pressure and feel forced into taking out one of these deals for the sake of convenience. If you’ve seen the car you want, ask them to hold it and return later with your finance deal in place.

Your Bank

Your bank will have personal-loan ranges and they may offer you one if you express a desire to buy a car on finance. But check that you’re getting the best deal on the market. It may be better to head online and do a price comparison.

Price-Comparison Sites

Simply enter a few details and these handy sites will search the market for the best finance deals on the market, saving you a lot of legwork. It’s possible to apply online for many of these loans, so you can get an instant decision and get the finance in place quickly to buy your car.

Alternatives to Outright Purchase

Remember that you don’t have to buy your car outright. Look at leasing and hire purchase as options, but be clear about the features and benefits and whether they will genuinely be a better deal for you than buying a car with a loan.

Also, put yourself in the best possible position to finance a car before applying for credit. Save a cash sum for a decent down payment, so you can borrow as little as possible. Make sure your credit record is in good condition before you start to apply for loans, because if you’re turned down it will reflect badly on you as each application records a hit against your record. Get a copy of your credit report from Equifax, Experian or Call Credit for just a couple of pounds and see if there are any errors on it, or areas you can tidy up, such as closing down little-used credit-card accounts, making an outstanding payment, registering on the electoral roll or staying at a permanent address to show stability.