Car Finance

When securing the best car finance deals then you should avoid the loan quotes that the dealership offers. If you are buying your new or used car from a dealership then they will try and get you to take out finance alongside the car. This is not the cheapest way to get the best car finance deals. A much better option is to go online with a specialist website and allow then to conduct the search on your behalf.

A specialist will be able to gain access to the bulk of the market place as well as many exclusive deals not open to the general public. This means that they can secure the best car finance deal in just a short time. The majority will give instant quotes. There is more to getting the best deal than just comparing the quotes, you also have to be aware that there can be additional costs added onto the loan. For example, if you find you can repay your loan before the stated term, it is likely you will incur early repayment fees. The terms and conditions will also tell you how much interest you will pay and how much the loan will cost in full. This makes comparing loans cheaper.

Used vehicle finance deals vary and it is essential that you read the terms and conditions that come with the loan. It is here where you are able to find out how much the loan costs in total, how much interest will be added onto the loan and if there are any fees attached to the loan. Some loans will come with early repayment fees and this would mean that if you were lucky enough to be able to repay the loan off early you would have to pay a one off lump sum of money, typically around two months’ interest.
The interest rate for the borrowing will depend on certain factors. One of the very first things that are taken into account is your credit rating. A poor credit rating will mean that you will have to pay a higher rate of interest than those with an excellent rating. After this how much you wish to borrow will come into it as will how long you choose to take the loan over. If you do not need to borrow a large sum to finance your vehicle then you could be able to take advantage of an interest free loan for so long. If not and keeping the monthly cost of the loan down is a necessity then you might have to spread it out over years.

So how can you ensure you sort out the best new or used car finance?

Here are some simple tips:

• Shop around. A loan is almost always a much better way of paying for that purchase. Don’t assume your bank will offer you the best personal car finance - or that you can’t get credit elsewhere.

• You may be offered a lower price or higher spec if you sign up to HP through the dealer. Always negotiate the best price for your vehicle independently of any car finance arrangement.

• Knowing in advance what interest you may be paying for the vehicle will help you budget better. Any deal will depend on your overall credit rating. Check first using our car finance comparison tool. Alternatively, use our Smart Search system that can find the cheapest loan based on your credit score.

• When applying for a loan, think carefully about the repayment period. The longer the loan period, the more interest you will be paying on the car you buy.

• Some loan providers structure their deals so that lower interest rates apply once the loan exceeds a certain level - £5,000 or £10,000 for example. After this point, the APR can drop quite substantially. So it can be worth borrowing a little bit more to benefit from a lower rate.

The interest rates that are charged will vary between 6.9% and 36.9% which makes shopping around essential. One of the biggest factors that will determine the rate is your credit rating. If you have a good credit rating then you will be able to get the cheapest rates, however if yours is less than perfect then you will be at the higher end of the charging scale. If you have a poor rating you would be wise to build up your rating before applying for your loan.

By going with a specialist website for the quotes and allowing them to take you though the loan from beginning to end not only do you get the best car finance deals, you are also more likely to be accepted for a loan and in the majority of cases from applying to reaching a decision on the loan this can be as quick as 24 hours. A specialist is able to take you every step of the way and as finance is very often confusing this is a Godsend.