5 Things You Need To Consider When Arranging Car Finance
When you are arranging car finance, you need to carefully consider that you have got the best option for you, which may take some time preparing prior to purchasing your car.
Number 1 – Don’t Just Accept Dealership Finance
Most motor dealers will only have one financier, and although you may obtain approval through this financier, does not necessarily means that it is the best and right finance deal for your own individual circumstances.
Also remember that the dealership Finance Manager’s job is to profit as much out of the finance as possible, as the margin on vehicles are not what they used to be. Just shop around beforehand and also don’t sign anything with the dealership unless you have done all your research and only if they truly do have the best deal on offer. The convenience factor they will sell you can cost you thousands.
Number 2 – Compare All Features, Not Just The Interest Rate
When you are comparing the finance quotes you have obtained, the best way to compare side by side, what the cheapest option is going to be, is by comparing the actual repayment. Whilst interest rate is important, the low interest rates can at times attract high fees that outweigh the interest rate discounts, and by comparing the actual payment on the exact same amount and term is the best way to measure this. Also check what any early exit costs would be if your intention is to pay the loan off quicker, as this should also be factored into your overall car loan costs.
Number 3 – Don’t Apply For Car Finance Until You Are Satisfied With Your Quote
Although many financiers or credit assistance providers will encourage you to formally apply to get the best deal for you, this may have an effect on your credit file. The more times you apply in a short period of time, the worse your credit file looks, and this can impact on the deal that you should have achieved if you were to apply to the correct lender straight up. If any credit assistance provider requests personal information from you in order to quote, be very clear that you will not provide this information if a credit check will be done for the purpose of a car loan quote only.
Number 4 – Understand What Is On Your Credit File Prior To Applying
You are able to apply for a free copy of your credit file online. It is a wise idea to do this prior to applying for a car loan, so you can address any issues prior, rather than getting a surprise. Through this website, you can obtain your credit report without an enquiry being placed on your credit file. Most finance providers that will advise they can obtain a free copy of your file will have to place an enquiry on your file to do so, so be very careful.
Number 5 – Should I Do My Own Research And Apply Directly Myself?
Although you may be able to negotiate a good deal after a lot of research, it will be very hard for you to understand each and every lender’s criteria, as they will all be vastly different. You should consider speaking with a car loan broker who has access to a panel of lenders, as they can sift through all the different lender’s guidelines and not only recommend a lender that you would qualify for, but also get you a great deal through their relationships with their lenders. This not only saves you time, but can also ensure that you don’t place unnecessary credit enquiries on your credit file, protecting its integrity.