Car Finance options
Financing a vehicle is usually done through the dealer where you buy your car but this is not to say that you should not get comparative car finance quotes. Every car dealer has a number of financial institutions that they are able to get finance from. These dealers will generally have a preferred finance partner which offers the dealership faster service, a commission or similar incentive to put the finance through that institution.
You can easily get vehicle finance quotes which could save you a few percentage points on your car finance. When you translate the savings over a period of 3-5 years, this can amount to a very significant saving.
The installment sale vehicle finance agreement is between you and the financial institution where you agree to pay off the vehicle over a pre-determined period at an agreed interest rate. The interest rate can either be a fixed interest rate or a fluctuating interest rate. A fluctuating interest rate will mean that from time to time, the monthly amount may change.
At the end of the period, assuming you have paid as per the contract, the vehicle will be paid for and you can then take ownership of the vehicle. While the finance agreement is in place, the bank holds the title to the vehicle.
Car finance with a residual payment
In a residual car finance agreement, there is a percentage of the purchase price which is paid at the end of the period as a balloon payment. The purpose of these agreements is to lower the monthly installments and still have sufficient value in the vehicle when you sell it or trade it in, to cover the balloon payment and leave you with a deposit amount as well.
These vehicle finance agreements are negotiable and the balloon payment can vary quite significantly. The balloon payment is determined by the length of the loan and the age and value of the car.
Refinancing your car allows you to lower your repayments by extending the period over which you make the repayments. Many of us have decided to hold onto our cars for a longer period and refinancing gives you the ability to take some of the pressure off. In order to refinance your car, you will need to make a fresh finance application, so please be sure that your credit record and credit score are in good standing.
Bad credit finance
If you have a bad credit score it is still possible to get vehicle finance but you will need to get a credit score report. Contact us at firstname.lastname@example.org and we will send you the necessary instructions.
Essentially, your credit score provides the financial institutions with the probability of you meeting your obligations every month. A credit score that is not fantastic could just mean that the institution requires a larger deposit or higher interest rate or both.
Once you have your credit report (You are entitled to 1 Free credit report every year), you can check the adverse notifications. If there are unfair adverse notifications on your credit report, you will need to have them removed. This includes settled and paid up credit agreements or other negative endorsements that is preventing you from getting vehicle finance.