Buying a car on finance is an option for people who would like to spread the cost of buying a vehicle over a period of time. Buying a car is one of the most expensive purchases you will ever make, as when you buy a car you not only have to consider the up-front cost of the vehicle, you must also consider insurance costs, MOT and excess costs in the event of an accident. You should always have surplus funds, this is why many people decide to buy their Car on Finance rather than pay a lump sum.
What are the advantages of buying car on finance?
– You can spread the cost over a period of time giving you the option of choosing a more expensive vehicle
– You can save the money you were going to spend on an upfront payment and use it in the case of an emergency.
– New cars go down in value as soon as they leave the dealer, therefore financing gives you the option of trading up for a newer model after you have made a sufficient number of repayments.
What you need to be aware of when buying a car on finance
– When buying a car on finance you need to make sure you have a good credit rating
– Bad credit will mean you pay high interest and higher monthly repayments so check your credit score
– Make sure you have all your documents in order and to hand
– It is easier to apply for finance through a finance company that is in partnership with a dealership therefore if your credit is good, you can usually drive away the same day.
What you will need when buying a car on finance
– Full UK driving license
– Three to six months wage slips
– Employer details
– Proof of address dated in the last three months
– Address history for the last Five years
– Deposit
Remember that you will need a deposit, this is usually a certain percentage of the car price, and therefore this can vary from place to place. You should also consider the fact that if you opt for a car that is too expensive you may not be able to afford the repayments therefore it is best to go for something that is realistically within your budget. If you are applying for your finance with a reputable company however they should advise of you of this. You should normally be offered a loan that you can comfortably pay back.
