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A Better Way to Finance your Next Car

A Better Way to Finance your Next Car

Unless you don’t mind using public transport for the rest of your life, having a reliable car is pretty much a necessity for most people these days. If you don’t have the money to invest in one from the get-go, you might need to consider financing as your first step towards buying a new car. While it might sound like a complicated and scary process, getting started is simpler than you might think.

Four Steps to Finance your Next Car

Save up for a deposit

There isn’t a simple ‘one size fits all’ when it comes to car financing as everyone’s financial situation is different. Still, it is essential to consider using any savings that you might have to put down a lump sum for a deposit. Twenty percent is the general rule, but the more you put down, the more you reduce your payment plan, leaving you financially healthier in the long term. If you already have a car, you could also consider using it to do a part-exchange to save yourself some money.

If you don’t have, or can’t afford to put down a deposit, going down the guarantor route could be another option. This allows a trusted and willing friend or family member over the age of eighteen to co-sign your financing agreement and take responsibility for payments in the event that you might not be able to, providing you with a safety net.

Check your credit score and make use of online calculators

The better your credit score, the more options you will have when it comes to obtaining finance for your car. Try to improve yours in the months before you look to apply for a plan to reduce your monthly loan costs.

When it comes to searching for the best financial plan for you, make use of the quick check online calculators that many lenders feature on their site to help get you started. This will give you a rough indication of how much financial help you can get, alongside your eligibility, without running a credit check and causing any potential damage to your credit score.

Choose a car you can afford

While you might already have a dream car in mind, it’s important to think practically and in terms of the associated costs. The more expensive the vehicle, the more it will cost you in payments, so make sure to choose a car that you can comfortably afford without having to struggle each month.

Don’t worry though, this doesn’t mean that you have to compromise on style, with plenty of great deals on the market. Ultimately just remember that you will most likely be paying interest, so make sure to keep that in mind when budgeting and be smart when making the final decision on a car.

Research your options

There are many different options for you to choose from today to better finance your next car. Pay as you go is an excellent option for those looking for a simple, uncomplicated financial solution on their next motor.

In contrast, low APR options are best if you are looking to reduce your monthly payments. Many lenders also offer exclusive finance deals for young drivers, so be sure to take advantage if it’s your first car purchase.

You could also go down the leasing path, which is similar to renting, meaning that you will have to return the car once the lease term expires, but tend to charge a per-mile fee if you go above what is included in your original agreement.

Make sure to research and look at all of the options, including those on offer from a trusted car finance company, which may be available to you – if you think that one looks like it could be a good fit, get in touch with the lender to find out more and gather your information before making the big decision.

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