Get that car! (Low credit rating or not!)

Knowing how to best buy a car with bad credit doesn’t require a degree, the services of an experienced consultant, weeks of in-depth research into the subject online, or a well-thumbed How-To Guide ordered from Amazon! No. It’s really quite a simple process. If you know who to ask, your application for finance can be approved extraordinarily quickly, too.

A new red mini car

For many car dealerships across the UK, car finance customers are the lifeblood of their business. Arranging a borrowing facility with a lender is usually achieved by talking to a panel of them, rather than only working with one or two. Although dealerships will offer several services (sales, servicing, re-sprays, gadgets/extras, car and van hire etc.), their primary source of income over any given trading year is usually from selling finance schemes and packages. Turning away anyone with bad credit isn’t good for business. Why narrow your market and give other dealers a competitive edge?

If you’ve got a poor credit rating at the moment, and you really want to get on the road as soon as possible, do this:

1: Have a think about which option would suit you best

Taking out a car loan isn’t your only choice, although it’s well-worth considering. Why? Because you actually own the car and can sell it at any point, whether that’s when the loan is paid off, or mid-term, or whenever, meaning that you’ll be selling it with finance owing on it.

If car leasing is more your thing, you won’t actually own the car at any stage, no matter how many monthly payments you make. It’s still an option that a surprising number of people prefer though.

Some people favour a Hire Purchase agreement. What do you think? At least with HP you’ll own the car in the end, once the final monthly HP payment has been made.

2: Shop around

Of course it’s perfectly understandable that you want to get on the road as soon as possible, but please avoid signing up in haste. There are plenty of dealerships out there. And although there’s a few sharks in the water, most car finance providers are excellent and go about business in a straightforward manner.

With there being so much choice available to you, you can afford to shop around, to get the best deal for you. Compare prices, talk to different dealers, read customer reviews online… All your homework will pay off and should lead to you getting the most suitable car finance deal to meet your particular requirements. Try to find dealerships and motor finance arrangers that use a panel of lenders rather than just one if you can, as this will considerably increase your chances of finding funding.

3: Don’t let anyone panic you

If you’ve got bad credit, that may make you a target of unscrupulous opportunists out there. Some dealers and car finance experts will offer you a deal, explaining that the offer is “time-limited” and that “given the market at the moment, it’s likely to be the best offer you’ll get – possibly the only one. So you’d be wise to grab it!” Ignore all that rubbish. Don’t be rushed or bullied by anyone.

4: Don’t spread the repayments too thinly

Bear in mind that, as well as making monthly repayments on a car loan, you’ll also have to pay interest on the loan. Opting for a short (three-year) car finance deal makes sense, therefore. Don’t sign up for longer than that, if you can possibly avoid it.

5: Be vigilant for hidden fees, read the small print…

This one’s self-explanatory really. Just be sure to read the contract put in front of you very carefully, and get someone else to look at it too, if you can (to get another opinion). Also, make a point of asking the dealer about the total fees involved in the deal. Look for transparency. Trust your instincts, too. If you smell a rat, walk away.

6: A handshake is not enough

It goes without saying that you should get everything in writing. But it’s surprising (alarming, actually!) how many people enter into agreements in the motor industry merely on a handshake. Don’t ever do that. Get a formal contract. If it’s sent to you via email as a document attachment, or in another form online, print it out and keep a copy somewhere safe.

A million cars bought on finance in the UK in a year. Fact.

Whatever you see on the News or read in the newspaper, supposed “post-Brexit concerns across the country” has not stopped the UK motor trade from continuing to flourish, as it has after the country slowly recovered from the Credit Crunch few years ago. In 2015, a million vehicles in this country were purchased through car finance agreements, in fact. “Yes, but how many of those new car owners had bad credit?” you may ask. The answer is: THOUSANDS of them!