It can be an exciting time looking for a new car, from choosing the perfect colour to match your style, to the latest must-have interior features you can’t wait to use. But before getting too carried away with aesthetics and functionality, you need to consider the practical side of things, such as how you are going to pay for it. Financing a vehicle is a popular choice for those looking to spread costs of large purchases. Here are our tips on what to consider before financing a new car:
Check Your Budget
You’ve found the car you want, but can you afford the cost of the repayments? This is a very important factor to consider, ensuring you are not committing to payments you cannot afford in the first place. If you have a poor or bad credit history, it is important to ensure you do not fall into further difficulties. Most bad credit finance companies will go through your income and expenditure to ensure you have a positive disposable income. If you can’t demonstrate you can afford the car finance you want, you could find it difficult to be approved.
Prepare Your Supporting Documents
Many lenders will require you to provide supporting documents to your finance application. Normally this will be proof of identity and proof of address. You’ll need to have these documents ready before applying so that there is no delay with your application. With many companies Proof of identity could be your passport or driving licence, whereas proof of address can be a utility bill or bank statement. You could also use your driving licence for proof of address, but you may then need another form of photo ID. It’s also best to have at least your last few month’s bank statements available and ready as some bad credit lenders will ask to view these to assess your income and outgoings.
Check the Terms of the Car Finance Deal
Before signing on the dotted line, be sure to review the car finance offer you are accepting. Some companies may display hidden fees or terms in your credit agreement, so it’s best to read through and ask questions first before signing and discovering them when it’s too late. If there is anything on the credit agreement that you are unsure of, ask the finance company to explain it. Pay attention to anything like early repayment fees, the total amount of interest being charged and even the terms relating to in the event of missing payments. It’s better to be well-informed before going ahead than discovering later on less than favourable terms.
If a Used Car, Check that You’re Getting Value for Money
With so many ‘approved used’ cars out on the market, you’ll want to make sure the vehicle itself is up to the standards you expect. When buying a used car, you’ll want to ensure it has had a full inspection and that the documents relating to its service history (if known) and MOT’s are there. If anything is missing, or the condition of the vehicle is different from what was advertised, query this with the seller and ensure you are entirely happy before taking on the responsibility.
These are just a few tips to keep in mind when buying and financing a new car. Spending money on a new vehicle isn’t cheap, especially if you have bad credit, so ensuring you have got the best deal for you is important. If you can afford it and the car meets your requirements, there’s no reason you shouldn’t be happy with your purchase for years to come.
