It is extraordinary the way some people go about sorting out car finance. Compared with getting a new credit card or a bank loan, often people looking to get a car loan or car credit finance behave in a completely different way to normal, and yet there seems to be no reason for it.
It is almost as though car finance was a completely different type of financial agreement or arrangement, and that car loans can be treated in a different way, with different rules. To think this way is often to invite disaster, but what is it that people do which could be done better, what risks are people taking, what other options are available, and what are the benefits, both in the short term, and the longer term?
First of all, let's imagine someone who is about to get a credit card. What do they do first? It is an unlikely scenario that the first thing they do when looking to get a new credit card is to go shopping with a view to finding things that they'll be able to buy with it.
It seems to make little sense to make your first move in getting hold of a credit deal to go looking for ways of spending it, despite this often being the way that people looking for cars on finance or car finance deals do it.
Instead, it would make sense when looking for a credit card to shop around, look at the various options, considering both the short term offers such as low introductory rates and zero rate transfers, and the longer term benefits, such as a lower interest rate, an absence of annual fees or a lower balance transfer rate.
Once you've looked around, and you're sure you have found the best deal for you, you might apply for it. After all, there's little point applying for a credit card on the basis of their zero transfer rate if you have no other balance to transfer - it has to be a finance deal that suits your circumstances and needs as well as your pocket.
For many people the way they approach car finance is to leave behind the common sense practicalities such as budget, interest rates, credit history influences and poor credit implications. Instead, the first thing they often do is head to the car showrooms and dream about what they'll spend it on. This often results in disappointment and embarrassment when they're declined a car loan or car finance, or they find they're unable to be approved for the cheap car finance deals advertised, and are looking at paying a much higher rate of interest because of an adverse credit history.
Instead, it makes a lot more sense to sort out the finance first, before looking for a vehicle to spend it on. Despite the fact that many people don't approach it this way round, the benefits are considerable. In the first place, you're not shopping under a delusion, but instead know that you already have your car finance sorted.
Secondly, you have a clear and definite budget. It's easy to have a ball park figure in your head that's little more than a guess, and have a look around at the showrooms at cars in that price range. But if you sit down and sort out your car finance first you'll be able to make absolutely sure that everything's included, such as any registration costs, licensing and tax costs, insurance, fuel and interest payments, as well as the repayments on the car loan itself.
Once this hurdle has been dealt with you can then enjoy shopping for cars, because rather than guessing, or hoping, you'll know for certain whether you can afford a car or not, and can therefore look more seriously and more confidently at each once that appeals.
If you've been turned down for car finance already because of adverse credit you may have considered guaranteed car finance. If this is so, you may have given up on the idea of being able to sort out your car finance first before shopping, or given up on the idea that you'll be able to choose any car you like from any dealer you like.
Certainly it is true that some car credit finance firms offering guaranteed car finance do restrict you - but fortunately not all. If you approach getting your car loan or car finance sorted straight away, before looking for a car to spend it on, you'll stand a much better chance of getting the car you want, without the embarrassment and disappointment.
No comments:
Post a Comment