5 Mistakes to Avoid on Your Used Car Finance

For many people purchasing a used car is the most viable option to keep their costs low. However, it is still likely that you will need some form of used car finance. While there are plenty of finance options, there are a number of mistakes which can prove to be costly. Fortunately, if you take note of these five mistakes, you can ensure that you are happy with your new finance package.

Not Budgeting Correctly:
While buying a new vehicle can be exciting, when considering used car finance, Perth drivers need to ensure that the deal they choose is affordable in the long term. In order to have confidence in your ability to make your repayments each and every month, you need to correctly budget. Before you begin shopping for your used car finance, you need to write down all of your monthly expenses and deduct this figure from your income. This will give you a figure of your disposable income and determine how much you can afford each month. Don’t forget to include extra expenses such as dining out, clothing and the expenses associated with maintaining your new vehicle.

Failing to Compare Used Car Finance Rates:
One of the most common mistakes when organising used car finance is to fail to properly compare used car finance rates. With the range of finance deals available on the market, it can be a little overwhelming when shopping for the best loans. However, it can be a mistake to simply choose a loan because it looks like a great deal. It is a real mistake to fail to compare the rates available to you. Fortunately, independent brokers can assist you. A reputable broker will take your details and search through their panel of lenders to find the best rates.

Not Checking the Fees and Charges:
Another common mistake is not checking the fees and charges for the finance deal before you sign. Some finance deals have early repayment charges and other associated fees, which can make the loan unfeasible should you need to refinance during the loan term. For example, should you have an accident where your vehicle is written off, you may find that the insurance does not fully settle the balance of the loan when the fees have been added.

Focus Only on the Monthly Repayment Costs:
Although the cost of the monthly repayment is important for budgeting, it should not be the only consideration. Some loan deals are structured to keep the monthly costs low by extending the loan term. This means that even with a competitive interest rate, you will be paying far more over the course of the loan term. It is important not to opt for the lowest possible monthly repayment without considering the total costs involved.

Not Choosing a Reputable Company:
In these challenging economic times, many motorists have been caught out when using an unestablished loan company. There have been a number of reports of disreputable loan companies who have “sold” their clients finance deals to other companies. This can cause issues for the motorist and a great deal of stress. Therefore, it is very important to choose a reputable company.

If you are in need of used car finance, contact us. We are a specialist broker and our experienced team would be delighted to assist you in finding the best possible deal.

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