Used car finance options

It’s rather difficult buying a used car on finance as there are so many options and questions to clear. You wonder it it’s good value for money, or is it cheap? Is it a good idea getting a car loan in the first place? Can you trust and buy approved used cars on finance?

Well, there’s no right way to buying used car on finance as this route offers both a blessing and a curse. You have manufacturers with their own approved used car schemes and car supermarkets offering some great UK used-car finance. This guide will do its best to give you some answers.

Personal loans

Personal loans provides a popular means of providing you with the extra cash to buy a used car. If you have some savings, you can use a loan to provide the remainder money needed to make a purchase.

You can choose between a secured or unsecured personal loan where you need to provide some asset like your home as guarantee for a secured loan. If you don’t make your repayments, the lender can repossess some contents to make money.

As the loan isn’t linked to the car, there’s no deposit to worry about, so you own the car once you pay the money. However personal loans charge a high interest rate than manufacturer finance packages and there is a higher chance of a loan refusal if you have a bad credit rating.

Approved used

You can buy your used car on finance if you buy your car from a franchised main dealer and if it’s from the brand’s approved used scheme. Approved used cars undergo various checks where manufacturer technicians will repair any faults using original parts.

Most manufacturers have their own finance department for funding purchases of new cars where they offer similar packages for approved used cars including a personal contract or hire purchase plan. If you buy an approved used car, you know you are buying a well looked after car.

Car supermarkets finance

Used car supermarkets are large, independently owned dealerships which sell used and nearly new cars. They have more than 300 cars in stock anytime, and are much bigger than normal used-car showrooms.

Buying from car supermarkets is possible without the haggling and negotiating associated with buying from a smaller lot or classified ad as cars are offered at a fixed price. While there are minimal deals, there are more finance options available. As the Financial Conduct Authority regulates deals, there’s not much to worry about if there’s any issues in the buying process.

Top tips for buying through finance

· As you are borrowing money, make sure you know what you can and cannot afford. If you don’t maintain your repayments you risk facing a county court judgement against your house getting repossessed.

· Read the contract’s terms and conditions. Though it may be long, look for extra fees and charges to save money in the long run.

· You may not get the exact car you want like you would while buying a new car on finance. To get the best deal, you may have to make compromises regarding colour, trim level or body style.

· If you are getting a car loan, use comparison tools to get the best interest rates. Compare the rates at dealerships to choose the best offer if you find the same car elsewhere in the market.