More people than ever are choosing to pay for their next vehicle through car financing. In 2022, the UK car finance industry is booming and there are more options available than ever! Car finance is a popular option for those who want to get a car and split the cost into affordable monthly repayments. It enables buyers to usually get a better, more expensive car than they would if they bought with cash but instead pay for it over a set period of time. Car finance can be a large investment overall and can last for a number of years so it’s important that you get a deal that’s right for you and also the most affordable. There are a number of ways you can save money when getting a car on finance.
- Budget first, shop second
It may seem obvious that you should work out your budget first before you set your heart on a car but it’s a really important first step! The monthly budget you have can determine how much you can borrow and what car you could get finance for. You should also include any deposit contribution you can afford to put in. Having a car finance deposit can lower your monthly repayments as it reduces the amount you need to borrow from a lender. When calculating your budget, it should be affordable and realistic. You need to be sure you can make your monthly payments on time and in full each month. Failing to do so can result in serious financial issues such as defaults, CCJs and bankruptcy.
- Buy at the right time
If you need a car in a hurry, it may not be possible to buy at the best time of the year. However, if you’re planning on getting car finance in the coming months, timing it right can be really beneficial for you. If you’re looking to buy a used car, you can benefit from the best deals in March and September when the new registrations are released in the UK. Many people choose to get a new car and part exchange their old car, which you could then benefit from.
- Know your credit score
Most lenders will want to take a look at your credit score before they accept you for finance. They do this to see how you’ve handled your payments in the past and if you could be trusted to pay back finance. If you don’t currently know your credit score, you can use a car finance checker to see where you currently fall on the credit scale. Your credit score is protected by a soft search credit check. You can then see how likely you are to be accepted for car finance! If your score is a little on the low side, you could consider increasing your credit score in the run up to your application.
- Buy used or lower specifications
Everyone loves the thought of driving around in a brand-new car but let’s face it, brand new cars are expensive. The more a car is worth, the more you will pay back monthly. To keep costs affordable and get the car you want, you could choose to finance a used or nearly new car. If you want to keep your costs low, you could consider the lowest specification of a certain model over higher end specs that will bump your costs up.
- Compare insurance rates
Getting a car and having a car insurance policy in place go hand in hand. If you’re open to a few different cars, you should compare insurance rates for each. Car insurance rates differ massively from car to car and can be affected by a number of factors. In general, more expensive cars tend to be higher to insure but car insurance can also be affected by factors such as age and driving experience.