No matter whether you are buying a new car or a used one is a big investment. You have to be in a good financial situation to be able to pay for it. You can either pay by cash or you can opt for a finance agreement. A survey shows that recently 1.4 million used cars were purchased on finance.
However, to some people, cash is considered as the most preferred option over Cars on Finance. When it comes to a large purchase, people have to go for finance. For small purchases, people do not like to have debt so they spend cash on the item.
Here, we are talking about cars that fall under large purchases. And Cars on Finance is a quite a popular option among the people.
A Brief Idea about Car Finance
Car finance is an option that will let you borrow an amount of money that you can use for purchasing the car. Even for Second-hand automatic cars, you need a big amount and it is not easy to arrange at a time. This is the reason car finance is a convenient option.
You can repay the loan by instalment which means you have to pay a fixed amount on a monthly basis. There are different types of car finance facilities available in the market. The most common option is PCH or lease. Here, one can hire a car for a certain period of time by using one’s personal contact.
After that, there is PCP where you can purchase a car using your personal contact. In that case, you need a reliable Used automatic car dealership that will guide you regarding instalments. The third option is HP or hires purchase. It is a kind of agreement where you will hire a car and then you will pay the agreement via instalments.
Benefits of Purchasing a Car by Car Finance
There are some advantages of buying or leasing a car on finance. So, here are the benefits that you will enjoy by availing of the option.
A Monthly Fixed Payment
Once you borrow the amount you will repay it through a fixed amount. You have the liberty to choose the length of the payment. So, you have a clear idea about how much you are going to pay as loan repayment.
The best part of having a fixed payment policy is that there are no surprise fees. You can include the maintenance cost in your lease deal. So, you can hit the road without having any worry about the payment.
No Need for Deposit
If you opt for Used Automatic Cars on Finance you do not need to pay a deposit amount. It is the biggest benefit of buying a car on finance. No one is going to pressurise you to pay a deposit amount for leasing a car or purchasing it.
Availing Car Finance with Low Credit Score
Unlike other loans, you do not have to have a perfect credit score for availing of the option. If do not have an impressive credit score, even then you can get a loan for buying a car. However, if you opt for a personal loan you will be turned down by the bank. But, you will get to avail car finance easily and the lender will have a solid track to secure the agreement on their end.
Improves Credit Score
Since one will be bound by a fixed monthly payment they will be able to improve the overall credit score. It is often suggested that buying a car on finance is a great way to increase the credit score. Since you will be paying the amount monthly it will make you trustworthy to future lenders. So, in future, you will be accepted by a lot of lenders.
Invest your Money in Other Things
Since you are opting for an instalment payment, you have the liberty to spend your saved money on other things. A car finance facility will let you fulfil all your wishes as you do not have to face a financial crunch. You can go for home improvement or you can go on a trip with your hard-earned money.
There is No Need for a Lump Sum
Since you have opted for the car finance option, you do not have to have a lump sum amount of money. Anyone can own a car and it will never be a luxury dream. Even if you have money there is no need to invest it in buying Second-hand automatic cars.
You can Exchange the Parts
If you end up at a flexible Used automatic car dealership then they will let you exchange the car parts of your current car. And for that, you do not need to spend thousands of pounds. This exchange facility will come under the same agreement.
No Need to Sell the Old Car
You do not have to sell the old vehicle that you have to get another car. You do not have to face any financial trouble. You can easily get the car of your choice if you avail of the car finance opportunity. All you need to do is to choose an appropriate type of finance. You can either choose par exchange or you can opt for a car as well.
You can Deposit Your Car
During the time of trading if there is an equity of the car then you can deposit the car. It will reduce the monthly payment. In this way, you can also reduce the monthly payment amount so that you can save money out of that.
Buy a Better Car
As you do not have to think about the expenses and you do not need a lump sum money, you can get yourself a better car. You must know that most of the car finance deal covers the top range models. So, with a low monthly payment option, you can easily go for a car of your choice.
Secured Option
Car finance is considered as one of the secured options to own a car. It is not like a personal loan, you can add up the maintenance cost so in future you do not have to worry. If you have used the savings then you had to be responsible for the vehicle. This is the reason it is considered one of the safest options.
A Very Flexible Option
It is needless to say that this is a very flexible option one can get. Buying a car with cash will be exorbitant for some people. This is the reason you need to avail the option because it will secure your finances by saving your money and improving your credit score. You will get the liberty to choose your preferred car finance as well.
Liberty to Change Cars
When you have the option to buy a car without spending your savings you get the liberty to change the car frequently. You can buy a new car every year if you want to so, people who have a dream to get a new model can now fulfil their dream. You can easily rely on your car if it is the latest model.
Checking Eligibility is Easier
You have the option to check your eligibility whether you are able to get the car finance option. It is essential to check it before you opt for the option. There are dealers who do not provide this option, in such a scenario you need to look for a reliable dealer who will provide the option. However, if you have a good credit score, then you do not have to think about it.
So, these are the benefits that you will get enjoy if you avail the car finance option. Indeed it makes buying a car lot easier for car lovers. It is essential to find a reliable car dealer so that you can get comprehensive guidance for car finance.
FAQs
Can I get Car Finance with Bad Credit?
Yes, even with a bad credit score one can get car finance. There are many lenders who are willing to provide the option. If you opt for a guarantor loan, you will be able to get the loan at a low-interest rate. If you have a pre-approval personal loan, you can easily approach a car dealer.
What Credit Score do You Need for Car Finance?
A better credit score is obviously good for you but there is no such hard and fast rule to have a credit score. If you found a reliable dealer, you will be able to get the loan at a bad credit score as well. And while paying the monthly amount you will be able to improve your credit score.
Why is Car Finance Refused?
There are certain factors that may affect the car finance deal. So, here are the factors that you need to consider-
- A poor credit history that makes you non-eligible for car finance
- You do not meet the criteria set by the lender
- The lender does not approve your employment status
- You may not meet the age criteria
- You may not have the appropriate license
Why should I add a Guarantor to my Finance Application?
It is easy to get a loan with a presence of a guarantor. This is the reason you need to contact your friends or family and request them to be your guarantor. If you have a guarantor, you will be able to pay a lesser amount so that you can save a lot of money. In that case, the lender can check the guarantor’s credit score.
