Buying Cars on Finance Your Questions Answered

December 30, 2011 by  Filed under: Loans 

Many people have considered buying cars on finance but have not really known where to start. They can be very nervous of this type of credit product and unsure about how it could affect their finances.

Buying cars on finance is a very effective way to get the best car for your needs. You may not be able to afford a newer model car just using your savings. This could leave you struggling with a car that is not suitable and cannot provide you with good mileage and economy. Buying cars on finance helps you to preserve your savings and afford the right car for you.

To help you find out more about buying cars on finance here are a few answers to some of the most commonly asked questions.

1. Can anyone take out car finance?

Car finance products are basically just straightforward APR loans. These are available to all consumers between certain ages (typically 18 to 65 years old). However, it is important to note that some lenders will not accept customers that have a bad credit rating. This is why you do need to make sure you maintain a healthy credit history if you want to have access to products like car finance in the future.

2. How much could I borrow?

Most car loans will be between £2000 and £25,000. These are loans that are ideal for the purchase of new and used cars.

3. What do car loans cost?

The cost of your car loan will depend on the amount you borrow, the term of the loan and the level of interest payable. You will need to look at the APR and the term of the loan to work out how much you will have to pay overall. Also, check what the additional fees there are, such as late payment charges. This could also impact on the costs of your loan.

4. How do I pay back car loans?

When consumers buy cars on finance, in most cases you will have to meet a straightforward monthly repayment schedule. This means you will pay back the money (plus interest) that you owe on the loan in monthly repayments. In most cases, these will be by direct debit but you can also pay by debit card, cheque and cash (depending on the individual provider).

5. Are there any benefits to dealer car loans?

Dealers can offer some very attractive loans these days, so you should consider them when you are looking to buy cars on finance. You can get fast answers on loans from dealers and this can save a lot of time and hassle. You could walk into a motor dealers, pick the car you want and get a loan all in just a few hours. This is ideal if you need a car quickly and have a good idea about what you want. The key is to do your research and this very much includes talking to the dealer who has the car you want.

You can buy cars on finance easily these days. This is a very practical option and there are plenty of products available to meet different needs and budgets.

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