If you’re struggling to afford a car, buying one on finance can be a practical and cost-effective solution.
Unfortunately, prices are rising across multiple sectors, pushing people deeper into financial troubles. Some people are even selling their cars to make ends meet. The prospect of getting a car can seem unrealistic for some, but buying on finance can make these aspirations more attainable.
That said, securing a car on finance isn’t like waving a magic wand to make all your auto affordability problems disappear. You need to find the right deal and manage its terms effectively for the duration of the agreement.
Consequently, here are some things you should consider when getting a car on finance.
Using Comparison Sites
There is a range of car finance deals and providers out there. Each offers something different, tailored as effectively as possible to the potential client’s circumstances.
Consequently, you should try to find credible guidance on navigating all these options. On the website of CompareNI, beneath their heading titled Car Finance NI, the comparison website explains how they take the hassle out of finding the best deals. They have a quick and easy application form that takes 2 minutes to fill out. After that, you can get the best quotes available for your circumstances.
If you don’t live in Northern Ireland, there should be similar services for your region. You should also learn more about the expected costs and how comparison sites work to make the most of these situations. Once expert insights keep you informed, you can proceed more confidently when attempting to secure a car on finance.
If possible, aim for a loan with a 3-5 year repayment term. This will keep interest rates low and give you more breathing room to sell the vehicle at a better price before it inevitably depreciates too much.
Review Your Credit Score
Your credit score gives lenders an accurate idea of how reliable you are at paying back loans. The more favourable it is, the more likely it is that you’ll be eligible to access the best financing deals available.
Additionally, you should try to build greater awareness around your credit score in the interest of spotting any inconsistencies or faults. In rare circumstances, errors in your report may not be your fault but the rating agency’s mistakes. Get in touch and discuss these problems if you think there’s a discrepancy. If you successfully resolve these matters, better financial deals might await you.
Control the Budget
Buying a car on finance comes with many recurring costs. How affordable they seem to you depends greatly on your ability to budget.
There are a few things to map your spending around here. They are:
- Affording the deal’s deposit.
- Funding the monthly payments required.
- Covering the costs of maintenance, fuel costs, and insurance premiums.
- Accounting for any interest and tax rates incumbent with the deal.
Some of these considerations will need to be closely monitored over time. After all, fuel prices are rising exponentially in the UK, and further price fluctuations may force you to reconsider your circumstances. Take your budget seriously and continually revisit it.
Consider your other expenses that aren’t related to car finance too. Household expenses and changes to your personal income will obviously affect things. Don’t lose sight of the bigger picture.
Improve Your Negotiation Tactics
There is much room for negotiations when attempting to buy a car. You should never hesitate to ask dealers to lower the prices of their vehicles, especially with new cars, where discounts are often already available.
Making your purchase on finance can also give you more leverage when engaging dealers. Many of them try to sell financing deals along with the vehicle, and they’re often overpriced. However, if you’re preapproved with your own, these offerings won’t fly. Let that bargaining power give you more confidence and instil a savvier demeanour when discussing prices.
Have a Backup Plan
You’ve likely seen a lot of commentary about how we’re living in unprecedented times. The word ‘uncertainty’ is also being used to describe many different facets of life.
A finance deal might move along comfortably for some time, but unexpected problems can occur in other areas of your life that cause financial setbacks. If you find yourself in this situation unprepared, you may struggle to make your payments on schedule and soon after be forced to give the car back.
Therefore, having a backup plan is important should these circumstances arise, however unlikely it might seem. If you suspect you’ll soon have problems, you should contact the provider of your deal straight away and discuss options with them. It can damage your credit score if you abruptly stop making payments without explanation.
Remember that your provider will likely be accustomed to these calls due to the brutal cost of living crisis sweeping the nation. The financial fallout from the pandemic is still ongoing too. Depending on who your provider is and the deal you agreed on, they may be willing to be flexible during these unprecedented times.