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Top 10 Car Finance Tips

It is becoming increasingly difficult for many people to get car finance. However, that doesn't mean that it's impossible. Big purchases such as a vehicle can be unobtainable without some kind of credit agreement in place. This guide contains our top 10 tips for getting finance for your new car.

1. Get what you need, not what you want. We'd all love to see our dream car sitting on the drive, but the costs of insurance, fuel and maintenance add up. When settling on a budget you need to take all of these extras into account. Make sure your car is affordable for the duration of the credit agreement before you buy.

2. Think about the future. How long will your credit agreement last? You want to make sure the car you are buying will still be suitable for your needs in a couple of years.

3. Research thoroughly. Find out about not just your car, but also all the different types of car finance that are available. There are a number of different finance products available, so check out all the options before you commit.

4. Create a monthly budget. Before you commit to any car or finance product, do an accurate breakdown of what the real running costs are. Research the tax, fuel consumption and maintenance costs on the internet and add these in to the total monthly cost of the car. Always budget slightly less than you can afford. That way you won't be caught out by unexpected expenses such as repairs.

5. Sort out your finances before you apply. Once you have chosen your car and how much you need to borrow, take the time to sort out all your documentation. You need to be on the electoral roll and have your identity, address and employment records to hand before you make an application.

6. Only borrow from reputable lenders. There are many lenders out there who have been affected by the recession. This can have a huge impact on your finance agreement, so make sure you choose your finance provider wisely.

7. Be honest and accurate on your credit application. You are more likely to be turned down for credit if you leave out information that you feel may be damaging. Even worse, this could adversely affect your credit score as many lenders share information with each other. If you have CCJs or IVAs, be honest about them. Only by knowing all the facts can a finance company provide you with the best deal.

8. Negotiate well. Having finance already in place will allow you to negotiate with the dealer before you buy. If they are unable to offer you a discount, get some extras such as free warranty and servicing thrown in instead. It's amazing what you can get if only you ask.

9. Test drive and check. Before you buy it is imperative that you do a thorough check and test drive on the car. Investing in a professional inspection is money well spent, as they should be able to identify any potential future issues with your new car.

10. Check your paperwork. Before you commit to any type of finance, check the paperwork and all the small print thoroughly so you don't get caught out for missing a payment. Know your rights before you sign.

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