If you're looking to buy a car, and need to think about car finance, then the following guide will be invaluable in helping you to choose between the various options and approaches that might be possible, and to be aware of the truth behind some of the myths which are popularly associated with car finance, car loans and guaranteed car finance.
Many people also make a common mistake when it comes to the order in which they think about buying cars on finance, and in this guide we'll look at the best way of approaching the purchase of a new car, and why some methods can be fraught with problems.
Car Showroom Or Car Finance? Which First?
One of the problems many people experience is spending ages browsing the online adverts, the adverts in local magazines and papers, and the forecourts of dealers, eventually finding the perfect car, only to then find that they can't get the car finance they need for it. Often people can waste huge amounts of time looking at cars, only to experience disappointment and embarrassment when it comes to sorting out the paperwork.
Rather than look for the car, and then sorting out the car loan or car finance, a much better, more practical and much safer method is to sort out the car finance first, and then go looking for the car, knowing what your budget is, and knowing the finance is already in place.
Many people find this idea surprising, and often don't realise that such an arrangement is possible. After all, how can you get car finance or car credit if you haven't actually found the car yet? The idea is simple. By calling a car finance company which arranges guaranteed car finance deals in advance, you can have a definite figure provided to you, which will be a guaranteed offer of car finance.
This means you're already approved for car finance up to that value. Your next step is to look for the car you want, knowing not only what your budget is, but that once you find the car you're after, there will be no issue with arranging the finance, as it will already be covered.
I Have Bad Credit - Surely I Can't Get Cheap Car Finance?
If you have a low credit rating, possibly with late payments, missed payments, arrears, defaults or even CCJs, or perhaps if you have no credit history at all, you may well find that getting unsecured credit or an unsecured loan is next to impossible.
But if you apply for guaranteed car finance, you're much more likely to be approved. Why? For two reasons: firstly, the car loan or car finance is not unsecured , since the car is the capital which will be used if you don't keep up repayments.
Secondly, guaranteed car finance firms will only consider your credit history in very general terms - more to confirm your identity than anything else. What they will be looking at with you is not so much your past as your present. After all, you won't be paying the car finance off last year, but now. As long as you're earning enough now to cover the repayments, they'll be able to approve you for a car loan.
Guaranteed Car Finance Means Freedom And Flexibility?
In some cases yes, but you need to be aware that not all guaranteed car finance firms work the same way. In some cases you'll find that whilst you're offered the chance of freedom and the open road by being approved a car loan one minute, the very next moment you'll find that the loan is being taken away from you, because you're only allowed to use it to buy one of their own cars. This is where car finance firms become car salerooms, forcing you to buy from their own very limited range.
If you want complete freedom and flexibility, then apply for car finance with a company that doesn't tie your hands behind your back (which would make driving rather difficult anyway). By applying for car finance, you could find yourself able to enjoy the freedom and flexibility of choosing any car, from any dealer, and with peace of mind thrown in for good measure.
Print This Article
Add To Favorites
