Bad Credit Finance - Top 10 Tips

Car Finance Tip 1: Need Versus Want

We’d all like to see a Range Rover on the driveway, but be realistic about the car you can afford to finance. The costs of fuel, insurance and servicing aren’t getting any cheaper, so think about what is affordable now and in the future and not just your dream car!  By looking online or in motoring magazines, you can get a rough guide to how much it’s likely to cost you each month and this is a good place to start. moneybarn have a responsible lending policy and we’ll never lend more than you can afford to comfortably pay – make sure you’re sensible about what you can really manage too.

Car Finance Tip 2: Look To The Future

It’s tempting to buy a car with your heart and not your head! Whilst we all get emotionally attached to our cars at some point, try and consider financing a car that will meet your needs for the duration of the finance agreement and not just the next couple of months.  Equally important is to remember that if you buy wisely, when your car finance deal ends, you will have a car that has retained more value that you can then use to invest in your next car. Most car magazines feature information on the cars that have the best residual values in the UK which are well worth looking at.

Car Finance Tip 3: Research

Take the time to research your chosen car and the types of finance products that are available carefully. Once you’ve got an idea of the car you want, take the time to compare your options. There can be a huge difference in quality and price between dealers across the country and there will always be another car around the corner, so try not to compromise. Use the internet to create a shortlist of cars and also consider researching car reviews and owners’ forums which can be invaluable in helping you find the right car for you. It’s also important to choose the right finance product – the types of agreement available can sometimes be confusing and at moneybarn we spend a great deal of time talking to customers about their options before they buy – talk to us if you want any advice, we’re here to help.

Car Finance Tip 4: Put Together A Monthly Budget

Before you commit to a car finance deal, do your research. Find out the cost of insurance, check the road tax you’ll need to pay and do some investigation into servicing costs and the price of consumable items like tyres and brakes.  Most car finance companies require that you keep the car serviced in accordance with the manufacturers schedule, so if you can’t afford to keep the car in good order, it’s unwise to take out a finance agreement.

Car Finance Tip 5: Get Your Finances In Order

Once you know the car you need, how much it’s going to cost and that it’s affordable to run, take the time to get your personal and financial information sorted out. Make sure you’re on the electoral roll, check your credit file to ensure it’s accurate and get your banking, employment and identity documents ready in one place! At moneybarn, when we review your car finance application, our process is more involved than just looking at your credit score – we need to see evidence of your employment, address and identity and also check that the car you want is affordable. It makes the whole process a lot easier and quicker if you have these items to hand!

Car Finance Tip 6: Choose Your Lender Wisely

There aren’t very many actual lenders left in the non prime car finance market – the credit crunch left a few casualties amongst lenders who got caught out by the economic downturn. This makes it even more important that when looking at car finance companies, you make sure you are dealing with a reputable, secure and customer focused organisations. moneybarn have been trading for nearly 20 years (through 2 recessions) and have recently had multi-million pound investment so we’re here for the long term!

Car Finance Tip 7: Be Accurate and Honest

It’s amazing the amount of applications we get from people who omit information from their paperwork or try and pull the wool over our eyes! When considering bad credit or poor credit car applications, it’s even more important that we have an accurate and complete picture of whether you can afford car finance with us. If you put false information or leave out information that you think will harm your chances of being accepted, the chances are we’ll find out and reject your application straight away! We’re sympathetic lenders – we’ll consider applications if you’ve been through an IVA or bankruptcy, but we definitely won’t consider applications that aren’t genuine.

Car Finance Tip 8: Negotiate

Once car finance has been approved, use this to your advantage with your local dealer. A prospective customer with funds in place is much more attractive to a salesman than someone without, so work hard to get a good deal. Even if you can’t get a discount on the price of the car, try and get some added value from your new purchase – free servicing, extended warranties or discounted accessories are often available – if you don’t ask, you don’t get!

Car Finance Tip 9: Inspect, Check and Drive

It goes without saying that before you sign on the dotted line of the car finance agreement you should test drive and thoroughly inspect the car you want to buy, but there is much more you can do to make sure your new car is in good shape. moneybarn recommend you invest in a professional inspection (The AA and the RAC both do these) before buying – these are a basic check that the car isn’t likely to cause you major problems in the near future.  By checking out car reviews and forums you should also be able to get an idea of common issues or things to look out for on particular models – make sure you ask questions of your dealer if you see or read anything relevant to your car. And always look at the service history and consider when then next major (and minor) service is due.

Car Finance Tip 10: Read The Paperwork

However you choose to finance your car, it’s vital you read through the paperwork before going ahead with the deal. It’s important to understand the specific terms of your car finance agreement, the implications of non payment, your rights under a finance agreement and where to turn to if you need help. At moneybarn, we’re always happy to guide new customers through the paperwork and answer questions.