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Saturday, 15 June 2019 09:11

Complete Beginner's Guide to Car Finance: Everything You Need to Know

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bmw  Buying a new car is so exciting, the thought of driving off the forecourt with your new pride and joy is exhilarating. Financing a new car, however, isn't so exciting.

There's the fact that you are going to be faced with an extra payment every month alongside the complicated jargon that the finance companies like to try and confuse you with. Luckily, for you, we've done the hard work to try and help you get your head around it all. Read our guide to understanding car finance and your trip to the garage should be a doddle.

 

Learn The Language of Lending

There are plenty of terms that you might hear when applying for a loan that you just won't understand. They do make a difference, though. They could, for instance, affect how much you will need to pay on a monthly basis or how long you will be paying for. Take a look at this car financing glossary before you head to the garage and be forearmed with knowledge

 

Find a Good Financing Deal

Search online before you even head out shopping for your new car so that you have an idea of what is available. It is easy to car loan as an alternative finance offers online, so make sure you do this before you allow a salesman to try and push you into their deals.

 

Apply for a Car Loan

You could even apply for a car loan before you head out. This way, you know exactly what your options are before the salesman gets to you. A salesman will always try and sell you their finance offers but they might not necessarily be the best for you. If you have already secured finance, you are in a much stronger position to say no if the deal is not right for you. It is worth saying at this point that you can also use a car loan to finance a motorcycle purchase. Take a look at one of our latest reviews and see if you are tempted.

 

Why Your Credit Score Matters

Your credit score tells a financer how likely it is that you will pay off their loan to you in full. If you have a low credit score, you represent a higher risk to them and they will punish you with higher interest rates. It's always best to spend some time trying to fix a poor credit score before applying for finance if you can.

 

See What Financing the Dealership Offers

Sometimes the dealer might well have the best offer. They are, after all, incentivised to offer competitive rates to help them finalise sales. It is worth hearing them out before you make your final decision.

 

Finalize the Deal 

Once you have chosen your car, the dealer will guide you through the finalisation process. If you are using a lender not affiliated with your dealer, it will just be a case of telephoning them from the dealership to get the process going. Trust us though, the dealer will make this part as easy for you as possible.

 

Things to Do After You Have the Loan

Once the loan is in place you will be able to drive away your new car. The main thing is to make sure you make your monthly payment in full and on time every month. Failure to do so will only make it more expensive and more difficult for you when it comes to securing finance in the future.

Last modified on Monday, 17 June 2019 20:13
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