Getting car financing in the UK whilst having a bad or very poor credit rating is not impossible, as long as it comes with a little planning and some know how.
It pays both now and in the future to be prepared and educate yourself on your own credit history and score, as well as the types of loans that are available to you.
In the end your credit score and what you are doing to improve it will determine what kind of interest rate you end up getting.
Working with past creditors and future lenders to clean up your credit score will help you most in getting the financing that is most beneficial to you.
1.
Improve Your Credit Any important financial decisions such as buying a car should be planned out and prepared for.
The very first thing you should do before you even begin looking for a car or getting financing quotes from lenders is study and improve your credit score.
This credit score is the main deciding factor in determining if you get the loan, how much of a down payment you will need, and what your interest rate will be.
Improving your score, even by a few points, can make or break you when it comes to getting the loan in the first place and then determine whether or not you can afford the car and loan in the future.
2.
Offer the Highest Down Payment Possible Advertisements for car sales that require no or the smallest down payment possible are abundant, and while they seem to be a great deal they are in fact not a good deal at all.
No or low down payment deals only work for the car dealer and the lender because it raises the interest and amount of money you will be paying over the life of the loan.
As the loan progresses, so does the age and wear and tear on your car, but while the value of your car is decreasing your loan payments are not.
For this reason, it is important to pay the highest amount that you can afford as a down payment, shaving off as much interest as possible.
3.
Use Different Lender and Dealer When you decide to buy and lend from the same institution, you limit your car and financing options.
Even though this may be convenient in getting you the car and loan approved right away, it might not get you the best deal that you possibly can.
In addition, you are also limited to the cars you can look at if you are relying on the car dealer for financing since you will not be able to shop around with your loan offer.
For these reason, it is important that you keep both your car dealer and lender negotiations separate.
4.
Get a Second Opinion In almost everything in life where a big decision is about to be made, it is important to get professional advice in the form of a second opinion.
Before deciding on the car you want to purchase, get a second opinion and have an independent mechanic look under the hood.
Purchasing a car can be expensive in itself, and added mechanic repairs are not even added into the bill yet.
By having a professional check the car you are looking at you can be saving yourself hundreds or thousands of pounds in potential repairs that you would otherwise not notice until after you have made your purchase.
Purchasing a car with bad credit is not an impossible feat, and it can be done.
Being well prepared and looking around for lenders and car dealers that are willing to work with you are the most important things you can do to secure the car you want.