Britain’s new car market is in surprisingly rude health. Over 2 million people bought a new car last year, the highest figure in four years, with a 12 per cent growth in purchases by private individuals as opposed to businesses and institutions.
Prices have shifted downward, as manufacturers look to the UK to make up for a shortfall in Europe’s debt-crisis riven market. Likewise, government incentives to buy new and green have had an effect. Finally, low interest rates have allowed banks and other lenders to offer competitive packages that take the sting out of buying a car.
If you wish to trade in your old model or purchase your first car, finance could well be the best way. Read on for our top 5 tips to getting car loans to work for you.
1. Don’t go through the dealer
Even if dealers can get better rates from the banks and loan providers, by the time they have added their own cut you are most likely looking at paying too much.
The best car loan deals out there are with the loan providers themselves or brokers. With interest rates so low, they are able to pass on car financing deals that are brilliant value.
2. Know your credit rating
Failed loan applications can do further damage to your credit rating, so make sure you have an idea of your credit worthiness before applying for a car loan. There are plenty of credit-checking facilities online which will give you their credit rating in a matter of minutes.
Speak to loan providers to find out their policies and how they might treat applicants with imperfect ratings. Search for car loans at Car Loan 4U, where they strive to provide a solution for applicants of all credit histories. They also provide a car loan calculator so you can quickly work out what you’d repay.
3. Do your homework
Doing your research is critical, and amounts to more than knowing what you will be paying back every month, even though this is obviously a key consideration.
Make a budget before you start looking for finance, so you know what you can pay down and what you can pay back each month without creating financial difficulties. Thus armed, you can be clear on what cars you can look at and what finance arrangements you can explore.
4. Build up a down-payment
Try and build up as sizeable a down-payment as possible. The amount you’ll need to repay will be smaller, meaning monthly repayments will be more manageable, and you’ll be more likely to secure better interest rates. Furthermore, if you want to trade your car in before the loan is fully paid, off there’s much less chance of being in negative equity.
5. Can you get a better deal?
Many of us have outstanding finance on our cars, but we might not be paying the best rates. There could definitely be benefits to trading your car in, especially if you’ve taken care of it.
If the amount you have left to pay back on your loan is less than the value of your car, trading in could free up enough money to make a significant down-payment on a better car loan package.
Read full story | 23rd Jan