If you’re thinking about buying a car, brand and model are not the only things you’ll need to take into consideration. In fact, cheap car finance is probably the most important part of the entire process. Unless you’ve got piles of cash secretly stacked away on some remote off-shore tax haven, after all, getting a car will always involve taking up a loan. And this, as you may well know from painful personal experience, can be exceedingly hard.
Car Finance: A Source for Trouble
The reason why cheap car finance is so hard to come by is closely related to the state of the overall financial markets. With interest rates low and the economy still refusing to grow significantly, banks are essentially considering every investment a risk. Compared to houses, whose value typically rises over time, cars are seriously losing in resale value very quickly. This means that rates tend to be high to reflect the underlying risk. And yet cheap car finance is not entirely impossible.
Cheap Car Finance: Is it safe?
You’ll only have to open your local newspaper to find dozens of ads offering you favourable deals, fantastic cars and cheap car finance. The real problem, therefore, is not finding cheap car finance at all. The real problem is finding cheap car finance that’s not out to rip you off.
Still today, many customers regularly complain to consumer watchdogs about shady deals and problems with their car which their dealer did not alert them to. Financial deals also frequently come bundled into mixed packages with various ad-ons, which are expensive and, more often than not, unnecessary.
It has to be said, though, that a lot has happened over the past ten years towards making second hand car deals safer. Yes, you will still need to take some basic aspects into consideration. But if you do, you stand a very good chance of finding not only an excellent car, but also cheap car finance with reasonable conditions.
Finding cheap car finance
So what are these terms for finding suitable cheap car finance? A few of the most important points are as follows:
- Calculate exactly how much money you’re paying as part of a deal. Don’t be fooled by monthly payments, it’s the overall sum of your rates that really matters. As you’ll be surprised to learn, what looks to be cheap car finance at first sight very often turns out to be extremely expensive in the end.
- If you can, try and improve your credit rating before applying for a loan. It is by far the most important indication of your financial health for most banks and car dealers and the better it is, the better your chances of getting cheap car finance.
- If you can, try to avoid banks. For one, their deals are rarely particularly attractive, even if you’re a long-time customer. Secondly, dealers specialise in cars and are therefore in a better position of providing you with a tailor-made offer.
- Compare as many different dealers as you can. The pre-purchase conversation with a potential dealer is essential. Cheap car finance is a lot about trust and sometimes, a slightly more expensive loan with a dealer you can really rely on can be your best option.
If you’re interested in professional, yet cheap car finance, we’d love to talk to you. Do drop by our showroom to discover our expansive selection of used cars and talk to us about a loan. We’re always there to help.