Some Tested Ways to Save Money on Car Finance

Everyone loves to see a few extras in the purse. Don’t you?

Yes, you can accomplish your dreams of getting the wheels on the road without breaking the bank. Buying a car is directly related to inviting comfort and is a significant lifestyle upgrade.

Thus, it is essential to explore the choices before picking just the right thing. You may tap your savings to get your favourite car. But is it a wise decision? Of course not. There is no need to explore savings when you have a bundle of better options on the table.

Around 85% of individuals finance car purchases to leverage better deals and discounts. It is incredibly comfortable while seeking a used car purchase. With many finance options available, you can rationalise flexibility in making the lowest monthly payments possible to minimise the overall loan cost.

It is okay not to have the money upfront to buy a car. It does not imply you have to abandon the dream altogether. Car finance is the best way to accomplish it without waiting any longer.

How To Qualify for The Best Rates on Car Finance?

Before buying a car, you must be clear about your budget, model, requirement, and deposit. To decide right, you must explore the best direct lenders and terms. Identify the hidden costs or charges in the agreement or ask the same from the lender. Here are some ways to get an affordable car finance quote:

1)      Check out the pre-registered car or test drive cars

You may not be acquainted with the fact, but some pre-registered cars come with a 70% discount. The car dealers make it available for purchase until 6 months after the dealership.

Since these cars technically had an owner, you can bargain on the price of the same. Regardless of whether they are brand new, if they have been used for test drives a good number of times, you may negotiate the price.

2)      Ensure  aflexible deposit for car finance

It is important when it comes to buying a car on finance. Interest costs and repayments are lower with a higher deposit. It works better for individuals seeking car finance on bad credit. You can choose the repayment term. Go fora shorter term.

As you pay a considerable deposit, the liability decreases. You can choose a realistic timeframe within which you can pay the remaining amount without skipping a payment. Likewise, if you go for a long-term car finance agreement, you may pay higher interest costs.

 Yes, you may choose one as per your income and other liabilities, but avoid it if you can. A responsible car finance direct lender helps you choose the best tenure as per your current budget and income update possibility. Never decide in haste; consult the expert lenders for a personalised solution.

3)      Refinance the car loan

If you already have a car finance deal but cannot make regular payments anymore, you can seek to refinance. It would help you reduce the car’s monthly repayments and interest rates. However, you would need to ensure solid finances and credit scores to qualify for the same.

 It is a great way to jump at the opportunity and grab a much more affordable quote and save money the best way. By doing so, you may also optimise your credit score. And the jump in the credit score would help you qualify for better rates if eying other loans. To improve your credit score, you can take the below initiatives:

• Register for the electoral roll
• Pay the debt dues
• Avoid applying for multiple loans within this time frame (6 months)
• Report delinquencies to the credit bureaus

4)      Always avoid the extra add-ons that dealers may sell

It is something that you should be mindful of. Always avoid the things or accessories the dealer may sell you in the garb of discounts. It may increase the overall loan costs.

It could be audio systems, warranties, gap insurance, tire protection insurance, car insurance, or central lock systems. You may find these critical for your car, but you can easily spot affordable deals rather than sticking with the car finance deals.

These accessories are expensive, so one must be attentive enough to understand the deal. In car loans, you would not experience anything like that because here, lenders focus more on ensuring a comfortable and affordable deal.

They never trick you into accepting the deal if you do not find it appropriate for your budget; hence, it is always ideal to approach a direct lender rather than a car dealership if you are a little low on finances but want to purchase the car without any hassle  You can even seek pre-approval with lenders that go absent with dealers and brokers  This pre-approval helps you negotiate the deal better.

5)      Repay the car finance early

The average car finance deal is around 7 years. The longer to extend it, the higher interest you pay. Thus, if you can pay off the car finance early, you can accumulate less interest and get away with the car quickly.

For this, you should check the car finance terms and never skip the broader terms like- “PREPAYMENT PENALTY” and “EARLY SETTLEMENT FEES PENALTY”. It is because if you pay early without knowing the terms, you may pay up more than required. It could then prove costly to your finances and budget.

It could significantly hurt the pockets if you applied for bad credit car finance from a direct lender in the UK. Chances are you may lose the build-up credit progress too. Identify how much you should pay if the lender allows you to do so. Paying a higher amount can benefit your dreams and credit score.

• Check part-exchange with the existing vehicle

Identify whether you can exchange the vehicle you own for the new one. Car dealerships launch many offers like that. However, make sure to complete the other car inspection before trading yours.

You can sell the car privately if you are still looking for a dealership apt for your need. The money you receive can act as a deposit and lower the overall costs. Before selling your car, update it and get the essentials fixed and repaired. It would help you ensure the best deal.

Bottom line

These are some ways to save money on car finance. Now, you have the information to make an intelligent decision. As you approach direct lenders, arm yourself with great details.