A car buy in a hurry can sabotage your finances. So it is better to take your time to decide on the best deal you have on the table. Read on to know how you can find the most favourable car finance deal.
You dont buy a car every day, do you? It wont hurt if you take your time analysing the car finance options available and take a decision which benefits you the most. You will do yourself a favour executing a few essentials before you drive off to the dealers showroom.
Calculating Monthly Cost
Factor in the cost of the car per month. If you have an idea of a car you are interested in, you can get the approximate amount by adding together the following figures:
* Divide the price of the car by the number of months you will be paying for it
* The cost of insurance and road tax per month
* The cost of expected fuel usage per month
* The cost of expected maintenance/repairs per month
If you feel that you can afford it, go ahead with the deal. However, if it is more than you can afford, look for a smaller car as this will usually reduce your monthly costs.
Valuating Your Current Car
Value of your current car can play a big role in deciding the costs if you are planning to replace it with a new one. Getting an old car valuation will help whether you are trading-in your car as a part-exchange or selling it privately.
Checking Credit Score
If you are planning to get a car loan, boosting your credit score will help. There are agencies which keep history of your credit accounts, mortgage and repayment history. They even have records of payments of your mobile phone, electricity and other bills. When you file an application for finance, lenders calculate a credit score based on details these agencies provide. If you try to hide a financial fact, it is just not possible as the reports of the external agencies will divulge the fact.
You can build a good credit history by making your payments on time and staying within credit limits. Your enrolment in electoral roll and clean court records will also help. Home owners and people in full-time employment are likely to get better rates than those who rent and are self-employed.
Shop Around For Loans
Dont take loan from any creditor who makes an offer to you. Always shop around and haggle hard to get the best deal. Research the Internet to find the most competitive car loan deal. You can also mail various lenders with your financial details requesting them to let you know if they can offer a loan to you. You may be advised to add the cost of the car to your mortgage at a lower interest rate. However, in the long run, you may end up paying more.
If you find the whole exercise just too complex, you could seek help from a broker who deals in
car credit. They have a panel of finance experts who can analyse your application and advise you on the best car deal you can get. What is more, they can even contact the lender and get it for you.
