When it comes to delving through car finances, it’s a bit of a minefield as you try to navigate your way. From simple car loans to private contract purchases, there is a huge amount of products out there that mean to help you get behind the wheel of your dream car.
The industry reported that around 80% of all new car purchases are made with the aid of financing. It can get extremely confusing, which is why we gathered these top tips for you.
#1 Shop around
Make sure to do your research, carefully comparing the various kinds of car finance deals that are accessible. Examine the APR interest rates as well as the total cost of borrowing that is related to each deal to help you identify the right one for you.
#2 Never stretch your finances
Make sure that you really can afford the monthly repayments on the deal you choose. Do not to over-extend yourself to get that better model and only sign up for the deal if it really is something you can afford. Keep in mind that if you pay a larger deposit, it will make the monthly bills smaller and help to keep your overall cost down.
#3 PPI & GAP insurance can be expensive
You will be presented with insurance to cover the repayments if something happens in your life, but think before you agree to it. Payment Protection Insurance (PPI) can be helpful if you can’t keep up with your payments, and GAP insurance pays out if the car is written-off in an accident when there is still outstanding financing. Both are expensive, and coverage can be limited, so know what you are buying.
#4 Be aware of extra charges
Read the small print and pay attention to extra charges that you might incur by making the repayments earlier than agreed upon contract or exceeding the mileage limits.
#5 Keep your credit score up-to-date
Your credit score will play a role in the type of finance packages that are available to you. When you improve your credit score, you improve your options. Repay your loans in advance or above the required payment to boost your credit rating. Avoid taking on too many credit loans at one time.
The last thing you want is a car finance company to take advantage of you, which is why it is so important that you understand the products that are being offered, take the time to compare them, look for cost-effectiveness, and then decide which one’s right for you.