How to get the Best Car Finance Deal

Are you looking to get a car on finance and not sure how to get the lowest car finance costs? It can be confusing if you’re not sure of the different types of car finance available to you and also the factors that can affect your car finance costs. For many people, it’s one thing to get a car finance approval but getting the best car finance deal is another thing. Our blog below has been created to help you consider the factors that could affect your car finance monthly payments and the steps to take to get the best car deal possible for your circumstances. 

Types of car finance to choose from:

In the UK, the most popular car finance agreements are hire purchase, personal contract purchase and a personal loan option. At Refused Car Finance, we specialise in Hire Purchase as it’s one of the most straightforward ways to finance a car, especially if you have bad credit. However, we do also have options for PCP car deals too. 

Top tips for getting the best car finance deal:

1. Work on your credit score

Whilst we are one of the best bad credit finance specialists in the UK, there are many benefits of having a better credit score. Lenders use a soft search credit check to check your eligibility for car finance. Applicants who have a better credit score tend to have a strong history of making payments on time and in full which reduces the risk it poses to the lender. Having a better score can also give you access to better finance rates. It can be worth improving your credit score before you start applying for finance to help increase acceptance rates but if you do have low credit, we’ve got you covered!

2. Use a car finance broker

3. Don’t just focus on the monthly payment

It’s important to make sure your car finance payments fit in with your monthly budget, it’s just as important to consider other costs that will affect the overall payment you make. Many people solely focus on the lowest monthly payment possible but you may not be getting the best deal. Pay close attention to the Terms and Conditions of your car finance agreement and make sure you review the APR. The lower this is, the better, as it means it’s cheaper for you to borrow the finance in the first place. It can be tempting to choose the longest loan term possible as your monthly amount will decrease but this means it takes you longer to pay off your loan and also increase how much interest you pay so it may work out more expensive than it needs to be. You should also factor in the cost of running a car into your monthly budget too. 

4. Refinance your current deal 

If you already have a car on finance, you may be wondering how to make your current payments more manageable. Refinancing is when you replace your current loan with a new loan with better terms, usually, you can benefit from reduced monthly payments or shorten/lengthen the loan term to make it suit your circumstances. If you have a car on PCP, you could also consider refinancing your final balloon payment to keep driving the car you love and make it more affordable. 

5. Explore different types of cars

This is definitely something to keep in mind if you have a particularly poor credit score. If you have a bad or poor credit score, you should expect that interest rates will be slightly higher – to the lender you’re more of a risk to lend to. It’s essential to find a car finance deal you’re comfortable with and can afford to repay. Getting a BMW on finance or financing a used Audi might be very aspirational if you have bad credit, as the amount of interest you have to repay on top of the car could make it more expensive.

We’d recommend coming in with an open mind about what type of car you’d like – as stated above, you can always rebuild your credit and refinance your car loan for a cheaper rate. And once you’ve repaired your credit rating, it will be more achievable to have a more expensive car, without draining your bank account!