Things to Bear in Mind When Looking For Used Car Finance
If you have chosen to buy a used car as opposed to a brand new model you may be able to save yourself a great deal of money. However, at the same time, your bank balance still might not stretch to paying cash and you may have to look for used car finance. Here are some points you may want to consider
Arranging your own finance before you go to the dealer, if this is where you have chosen to buy, may work out in your favour as the personal loan often comes with cheaper interest rates than hire purchase.
If you are going to look around with used car dealers for the car then always work out before you go how much you want to spend on a car. Use online loan calculators to work out how much you have to pay back monthly and how much the loan costs in total. It may be tempting to go to the dealer and see a car above your price range and be tempted or talked into taking on something you cannot afford.
If you are buying a very cheap used car, you may want to consider using your credit card to buy the car. If you have an excellent credit rating, you may be able to put the car on your credit card and then switch to a 0% balance transfer. This may work to your advantage if you are able to pay off the balance within the 0% period.
When comparing loans for used car finance always remember to compare the APR, this is the annual percentage rate. The cheaper this is then the cheaper the loan works out in the end. Look carefully at any loan that seems to come with very low rates of interest as they may be quoted as weekly or monthly rates.
Always check to find out if you have to pay a lump sum fee if you pay off the loan earlier than anticipated. For example if you take advantage of a special deal with a lower rate of interest for so long which then reverts to a higher and you pay off the loan early to avoid the higher rate, you may have to pay a fee.
Never rush into making any decision or sign any loan agreement without first looking over the agreement very carefully. When taking used car finance with the dealer they may try to tempt you to rush into signing by telling you such things as the particular used car you are looking at has others coming back to look again who are considering buying it.