Like all things in life, buying a car can be a wonderful experience tainted by some underlying doubts. Car finance can feel like a battlefield but don’t worry, we are here to debunk some of the myths that those new to the finance world struggle to get their heads around.
With the majority of the UK using finance to upgrade or buy a new vehicle, finance is certainly worth knowing about.
At Carvine we believe our customers deserve to be in the know about their money. Here’s our guide to getting the best out of your money.
Myth 1: Getting finance will harm my credit score
Bad credit gets a bad press. Fact.
Across the board, lenders are more likely to give a better interest rate to those with a good credit score. However, how are you ever going to rebuild your credit score if some lenders won’t even take the chance?
Having a poor credit score is a stumbling block that can really shake up your relationship with finance. Carvine believe that having a poor credit score isn’t the big picture when it comes to securing your finance deal.
Applying for finance through our friendly team won’t affect your credit score at all. So, take a chance on us, rebuild your confidence and give us a go!
Myth 2: You have to take the finance deal offered at the dealership
Nope, you don’t!
The trouble with accepting the first finance option given to you at the dealership is that you are likely to be missing out on the best deal for you elsewhere. It may seem like the simplest thing in the world signing then and there, but in reality, you’ll be throwing money away.
Shopping around and doing your own research before making any hard and fast decisions will open up a much stronger playing field for your finance options available.
Your credit score will not be damaged by “soft search” providers. Generally, it’s only when you commit to a “hard search” that any potential damage is done to your credit score.
Myth 3: Rates: What you see is what you get
Application processes are there for a reason! Most UK finance providers won’t reveal your actual rate until you’ve gone through the applying stage.
Headline rates are there to draw consumers in. So next time you see a tempting deal plastered to a car door or the billboard you drive by every day, think twice about accepting it at face value.
You are incredibly unlikely to secure the deal that is baiting you to take the first step through the dealership door.
Carvine tailors your loan to your circumstances and therefore is unique to you.
Lenders, on the whole, are interested in ensuring they get your monthly payments back as agreed. So pushing you beyond your repayment abilities isn’t good for anyone, least of all you.
Myth 4: Only compare finance on interest rate alone
Interest rates on the surface seem like the deciding factor when going down the finance road. Checking out the APR (annual percentage rate) will reveal more to you about the ultimate cost over a year than just the monthly overview.
Car dealers tend to focus more on the monthly repayments rather than the bigger picture. Having all the information at your fingertips – the length of the finance package, extra fees and charges, and the total to pay overall are all worth knowing.
Getting all your quotes in writing will help when you go away to compare what is available to you. After all, it never hurts to do your research! Plus, you’ll save yourself some money in the process.
Myth 5: Lower monthly payments are better all-round
The temptation to borrow money for longer to reduce your monthly payments always seems like a sensible idea. Enter the reasons to not go down that road!
Although it’s perfectly reasonable to have less monthly outgoings, borrowing money for longer may actually cost you more in the long run. Generally, longer loans mean you pay more interest in total.
With car finance deals typically lasting anywhere from one to three years, checking all the finer print will show you how much more you are likely to spend over time.
If you are trying to reduce your monthly outgoings, settling for a cheaper car will keep your borrowing amounts lower.
Ultimately getting a car on finance may be one of the best decisions of your life. Not only will you get a newer vehicle, but you can also build your credit score. So, don’t let the finance myths get you down. Go get the car of your dreams!