Why Car Finance Gives You More Buying Power at the Dealership

by admin

1035

The world of car finance makes buying your next motor much more accessible. Even dealerships favour you purchasing your car via finance over you fronting your hard-earned cash!

Car finance benefits all parties involved. It opens up more perks, better warranty opportunities and more spending power for you.

No longer do you have to settle for the best car you can afford at the time. Instead, lenders will take the brunt of the expense for you so that you can pay them back in low monthly instalments in a time frame that suits you best.

So how does car finance give you more buying power at the dealership? Let’s take a look:

No more waiting around

Back in the day, the only financial help you could wish for came from a direct bank loan. Or, you had to save for months, sometimes years, before you could cover the cost of a used car, let alone a brand new model.

Car finance removes the burden of time. But it also gives you access to the most affordable plans on the market.

While lenders will take your credit score in to account before agreeing to your request, a car loan can be a much cheaper way to borrow than other types of finance. Once approved, the money will be paid directly to your account so you can buy the car before you start paying off the loan in instalments.

Poor credit doesn’t exclude you

Traditionally car finance is only readily available to customers with an excellent or good credit rating, which makes sense. Lenders need to know that they will get the money back from you.

But that doesn’t mean that you are excluded just because you have a poor credit history. Bad and poor credit car finance is available from specialist lenders. They are more interested in supporting you to rebuild your credit score and get behind the wheel of your new motor – regardless of your circumstances.

So if you have a bankruptcy, CCJ, IVA or default on your account, these lenders will look at your individual circumstances to determine your creditworthiness. Self-employed? No problem.

More choice

One of the biggest perks of car finance is, of course, the choice on offer. No longer are you restricted to last seasons, non-shifting or used motors. Instead, you can get your hands on the latest models, best safety features and technology all because you have opted for car finance.

Plus, it’s a win-win for you and the dealer. They get to tap into the biggest profit maker in the industry, and you get to reap all the benefits.

Manufacturer warranties usually come as standard with a minimum of three years’ cover, and you may be entitled to free servicing too!

Access to the best safety features

New models of cars have a lot to boast about. Not only do they come with a whole array of technology that will instantly enhance your driving experience, but they are typically the safest motors on the roads!

Every new car goes through a series of tests at the Euro NCAP to determine how well it copes in the face of fire! (Well, crash tests mostly!)

You can expect all the latest safety features to be included with a new car, such as:

Automatic Emergency Braking (AEB)
Adaptive Cruise Control (ACC)
Lane departure warning
Rearview camera
Safety exit assist
Blindspot detection
And so much more

Not just for new cars

If you have your heart set on a second-hand car, then most dealers will be happy for you to use car finance to make your purchase. Just like buying a brand new vehicle, Hire Purchase and Personal Contract Purchase (PCP) are the two favourites amongst dealerships and customers alike.

You will still be expected to pay the usual 10% deposit followed by low monthly instalments over a fixed term. Want to pay your remaining balance ahead of time? Check out the finer print on your agreement.

You get to choose the type of finance that works best for you

Paying more than you afford each month is a big no when it comes to any purchase. Fortunately, there are several different types of car finance for you to choose from. While most will expect a 10% deposit followed by low monthly instalments, they do vary in what they offer:

Hire Purchase

One of the top 3, Hire Purchase is secured against the vehicle itself, and the car is yours once you have made the final payment:

Typical 10% deposit required
Repay the balance in low monthly instalments, plus interest over the loan period
You can’t sell without the lender’s permission
You can return the car
Servicing may be included

Personal Contract Purchase (PCP)

Great for people who like to change their car regularly, PCP is a flexible choice:

Typical 10% deposit required
Low monthly instalments paid over a fixed period
At the end of your agreement: either pay a lump sum (balloon payment) to purchase the car outright, return it or sell it privately to cover the remaining balance
Sale price based on ‘minimum guaranteed future value’ (MGFV)
You are hiring the car until you have made your final payment
Servicing may be included

Personal Leasing (Contract Hire)

Similar to PCP, but without the option to buy the car at the end of your lease.

Normally have to pay up to three months of rental in advance
Low monthly payments
Convenient and easy to change your car
Leasing costs are based on the type of car, agreed mileage limits and length of contract
Servicing may be included

More bang for your buck

First off, the lender has you covered. You get to pay back your loan at an affordable rate and get more choice than a traditional upfront cost purchase would get the average buyer.

But, it’s all the added extras that are included as part of your car finance package that is worth shouting about! From excellent manufacturer warranty coverage to service packages and potential recovery too, there’s a lot to consider.

Car finance has changed the world’s relationship with the automotive industry forever. You get more choice, access to the latest models and a whole ton of perks that you won’t find anywhere else. Where do we sign up?