Get Car Finance in Few Simple Steps

The current economic climate does not allow many of us to buy a car outright. Stats show that over three quarters of people will have to apply for car finance at least once during the lifetime. There are many different methods of financing with even more confusing names often meaning the same thing or overlapping across several lending products. The conventional car finance, also known simply as hire purchase, is the most convenient way to own a used car.

But getting your hands on a good deal is not that easy either; a whole troublesome and sometimes painstakingly slow process is often involved. All this can become somewhat easier if the whole process is broken down into few important steps like planning whether you will be buying a brand new or a second hand car to begin with.

Many people will be surprised what new car or nearly new car they could afford by looking at some leasing deals. But this is another story. Car leasing is not for everyone because in many cases you don’t own the car after the end of the term. When it comes to used car finance, you want to look at the rates ensuring that you get a low APR deal.

There are several factors involved. Firstly it is your credit rating. So you want to make sure you keep your credit rating at a good level. Things like not paying the bills on time and disappearing off the voter’s roll will have a detrimental effect on your credit file meaning that the average APR will be higher. Another thing to consider is the age of the vehicle. Generally, the newer the car, the better the finance deal. By financing good-quality cars, the lenders are reducing the risk, thus, on a 3-year old car you can get a better rate and stretch the payment term further. The chance is that your monthly payment will work out the same regardless of whether you take a newer car on a 4-year term or an old banger on a 3-year term. Which one would you enjoy more?

As for the next step, the borrower needs to pick a reliable loan provider. It is always a good idea to do an small research looking for different lenders and different options. There are a number of different leading institutions available to you including banks, credit unions, dealerships and car manufacturers who provide car finance on pretty reasonable conditions. To gain a good overview of the terms and APRs they’re offering, you’d have to do a lot of running around comparing prices. It’s good if you’ve got loads of time on your hands but my guess is that it’s not quite the case. To save some time, you can check online car providers. Very few of them actually lend money – the majority is just brokers but you don’t have to be afraid of this word as nowadays all the financial brokers have to adhere to stringent laws imposed by the countries where they operate.

The point is that the comparison will have to be done. You choose who is going to carry it out. Will you check the offers of banks and lenders on your own or will you get the broker to do the job for you?

Car finance is being provided by a large number of different institutions but in order to take the maximum benefit of this service, you need to pick the broker or the institution, which is offering the best bargain. The whole procedure might look troublesome at first but if you manage to get a good broker, you might be driving away in your new car in less than a week.
This guest post was provided by Creditplus online car finance broker.

(Editor’s Note: If you’ve decided that financing a car is the way to go, be sure your car payment is one you can afford! A good history of car payments made on time can be a great way to build your credit as well.)

Read 357 times