If you have a bad credit score, CCJs, have been made bankrupt or are unemployed, you can still buy a new car.
Though some lenders are put off by low credit scores, others will see you as a good prospect and will look at other credentials to offer you a loan. It is actually quite common for those with bad credit to be offered loans as in today’s market most lenders are aware that a person’s credit rating does not necessarily determine the borrower’s ability to make monthly repayments.
If you want a car loan but you’re not sure where to start, or you’re worried you may not be eligible due to your circumstances, read on.
Know your credit score
If you apply for finance without having an idea of your credit score then you may be wasting your time. Don’t let a lender tell you what your score is, find out yourself!
Looking at your credit report also enables you to check there aren’t any mistakes that could be affecting your score, and you can see what you need to work on to improve your rating. There are a number of companies that let you check your score such as Experian and Equifax.
Don’t go for the first deal you come across; take your time to shop around and compare deals to make sure you find the best one for you. Some lenders will offer better interest rates than others. Companies such as Clearway Car Finance provide bad credit car finance and so are more likely to offer a good deal to those with damaged credit.
Apply to car finance lenders
Rather than applying to finance lenders, go for ones that specialise in car finance. There are many car finance providers and they will be able to advise you on finding the right deal.
Ask for advice from friends and family
If you are worried about finances you may not want to tell your friends and family, but if you are open about looking for car finance they may have some helpful tips or ideas from their own experiences. Ask a friend to come with you when visiting dealerships; finance can be overwhelming sometimes and it can be stressful on your own if you are already worried about it. A friend will be able to give a fresh outlook on things and offer support.
Think about long term, not just the monthly repayments
When looking for a finance agreement, think about the long term implications and not just the monthly repayments. A longer agreement may mean lower monthly payments but you will actually end up paying more over the period due to the interest rates. The cheapest deal will be the lowest APR over the shortest period. If you can only afford to buy a car on the longest possible repayment term then you should reconsider if you can really afford the car.
Watch out for added extras
It is unlikely you need extras and they will just add on to your current cost. Read your contract carefully, including all of the small print, to ensure no costs have been added to your contract that you are not aware of. Unless it is essential, say no to added extras.