If you’re looking to buy a new car and want to get something more than you might be able to afford with just your savings, car finance could be the option for you. Not only do you spread the cost into manageable monthly payments, but there are a range of different products available to suit people in all sorts of financial circumstances.
Before you apply for a car finance provider, there are some questions you should ask. This will make the process quicker and smoother, and ensure you are getting the best deal for you.
Working out your budget before you apply will allow you to quickly work out how much you can afford to spend on car finance repayments each month. So it’s a good idea to sit down and go through your finances and expenditures that you know you will have to pay each month and see what amount is left over.
Make sure you include all the big bills, so mortgage repayments or rent, council tax, utility bills, and insurance or direct debits you have. As well as the regular expenses, you should also factor in things like going out, having fun, money for leisure. Be honest with yourself and make sure you aren’t going to squeeze your finances too much with a car finance package.
Once you have your budget, you can then see the amount you can comfortably afford on your car finance repayments. You can use the creditplus car finance calculator to get an idea of how much your package will cost.
A deposit will help reduce the overall amount of money you borrow, meaning your monthly repayments can be lower, term length shorter, and the amount of interest (not rate) you pay is lower too.
Some finance providers will allow you to part exchange your current car on the one you want to finance, others will not. Speak to your customer advisor to see what advice they can give if you want to use your current car towards paying the car finance for your new car.
There are some companies that will provide car finance without a deposit. Other factors like your credit score will affect this (see below), so it’s good to do some research before you apply.
Your credit score is the biggest factor affecting what sort of car finance package you can afford. The good news is that creditplus work with a wide panel of different lenders, who cater to customers from all sorts of financial backgrounds. But it’s still a good idea to check your credit score before you apply. That way you can make sure it’s accurate and you won’t get any nasty surprises when you apply.
Your high street bank should be able to provide you with your credit score. Otherwise, there are many online credit check agencies who will be able to provide you with your credit score for free.
The length of the car finance agreement will play a big role in the amount you pay, so it’s worth thinking about in advance. A shorter finance length means higher monthly repayments, but you also will end up paying less interest. A longer finance term is the opposite. Your final decision may come at a later point in the process, but it’s a good idea to keep it in mind.
This might be blindingly obvious to many, but it’s a good idea to know what car you want before you apply. You might just want to see what options you can afford, and that’s fine. But you should at least know a few things about the car you want to finance.
Sit down and work out firstly what you will be using the car for. Is it going to be one you just use in and around town with the occasional longer trip? Or are you going to be commuting or out on the road for long periods of time? And is this car going to be used by you and your partner? Do you need to fit a gang of kids in the back too?
By knowing what you need from your car, this will help guide you towards a vehicle that suits you perfectly. When you apply with creditplus, we can help find and source the right car of you from a network of trusted dealers all across the UK. So you can make sure you are getting the right one, and not just the nearest one.
One other question you have to consider is what sort of car finance product could be right for you. Take a look at the car finance product pages on our website to see what options are available. While you may not qualify for all of the different products, it’s a good idea to familiarise yourself with them in advance, even if our customer advisors will explain everything to you during the application process.
Asking yourself these questions before you apply will help give you a bit more understand of what you need from your car finance package. So you can ensure it’s a smooth road to your fantastic new car.