How to streamline the car finance process.
Car finance is one of the most popular ways for people to afford a car. Cars can be the second most expensive purchase you will make in life and many drivers couldn’t afford to do so without the help of credit. Getting a car on finance doesn’t have to be a stressful process but it can feel like there is a large amount of information to absorb. If you’re applying for first time car finance or you’ve been burned by finance deals in the past, our guide below provides quick and easy tips on how to get the most out of the car finance process.
Check your credit first.
When you apply for car finance, lenders are going to want to know how likely you are to pay their loan back on time and in full. An easy way for them to get an insight into your history of borrowing is by running a credit check on you. You should never allow a lender to check your credit score before you do so get ahead of the game and check your credit report for free first. This way you can see what the lender would see and make improvements to your score if you need to. It can be easier to get approved for finance with a good credit score and low credit could even see your finance application be declined.
Calculate your budget.
Knowing how much you can afford each month for a car is also one of the first things you should do. You should never borrow more than you can afford to pay back as it can lead to much more serious financial consequences. A free car payment calculator can help you to get an idea of how much you could borrow for car finance, based on your monthly affordability and your current credit score. Knowing how much you can borrow then gives you a good insight into how much you could spend on a car.
Know which car you want.
To help make the car finance process easier, it can be a good idea to write a list of the type of car you want and the requirements of your next vehicle. Do you need a large SUV for the family or is sports car finance more your thing? Think about how many seats you need, how far and often you drive and what technology/features you’d like to see in your next car. If you have a certain make and model in mind already, check out the market price of cars from local dealerships to get an idea of how much you would need to borrow.
Find a reputable lender.
Before you jump into the first car you see, you will need to get a reputable lender to borrow you the money to get a car. When shopping around for car finance, it’s important you get a deal from a lender who is trusted. All reputable lenders and dealerships should be verified by the Financial Conduct Authority, and you can check the FCA register to see if your chosen lender is verified.
Get your documents together.
If you have found a lender who wishes to offer you finance, you’ll need to supply them with a few bits of information to verify you are who you say you are. In order to reduce the number of fraudulent applications for finance, lenders will usually ask to see proof of your income, bank statements, pay slips, a driving license or passport and a utility bill or something similar.
Take a test drive.
Once the finance is sorted and you’ve found the car you like, remember to take it for a test drive before signing on the dotted line. There’s no point in getting a car finance if you don’t even like the car you are going to driving. Ask the dealer if you can take the car out and make sure you drive it on different roads to see how it performs. If you’re buying a used car, it also gives you the opportunity to look over the car without the watchful eye of the dealer and check that everything is as it should be.
