When financing a new car through a dealership, the rep will be working on commission so he will not necessarily be trying to sort out the best possible deal for you. The rep will try to get you to add clauses to the deal that you may or may not need, such as extended warranties, undercoating or an alarm system

As these extras are often where the dealer makes the most commission it is always good to do an internet search and find the best deals beforehand. Make a print out and show it to the finance officer (after he has made an offer) and ask if he can match it. More often than not he will do his level best to help you.

Getting your car finance through a bank or credit union can be a good idea as they usually offer competitive rates, a personal service and do not tend to give a sales pitch for extras. They can also give advice on how much you should be paying for a car and their loans often come with free life and/or disability insurance.

Though they are not quite as convenient as getting financing from a dealership as it cannot be done in the evening or on weekends, getting your finance from a bank is overall more advisable.

Carcraft Car Supermarket Finance works with a number of specialist lenders and their team of experts will help you find the car finance deal that is right for you. All their cars come with a 120-point check, one year’s membership of the RAC with Roadside Assistance, one year’s free servicing and flexible payment options. They also have specialist programmes for people with poor credit ratings and/or county court judgements against them.

A Brief History of Carcraft

Carcraft, based in Rochdale, was founded in 1951 by Frank Jacob McKee and remains in the hands of the McKee family to this day. In 1985, the company bought a car supermarket from the now defunct Car Group, for £10 million and in 2005 became the first car supermarket to launch its own contract car hire and lease company. Today, they are one of the largest chains of car supermarkets in the United Kingdom. Though they have come a long way since opening their first car dealership half a century ago, they remain a family business.

It is vital to acquaint yourself with the interest rate you are likely to be offered since this will naturally affect how much you’ll end up paying over time. Dealers can be very selective about the tariff they initially offer you on their car sales packages, so it is always good to haggle to obtain their best Annual Percentage Rate (APR). However, be aware that car finance companies will often base their offer on your previous credit history, so you do need to get your financial ducks in a row before you consider this avenue.

You’ll also need to take in account how long you choose to extend your payments over, since this can have a bearing on how much you end up paying back. It is always a good idea to enquire about hidden admin charges or penalties such as early repayment fees or one-off setup costs, which may be surprisingly high.

One option that many people may not be aware of is to borrow money against their mortgage, rather than take out a car finance package. This is particularly true if you have an offset mortgage with a buffer fund – often the interest rates on this loan will be much lower than anything you’ll be offered in the showroom, so it is worth talking to your mortgage company or bank to see if you have this facility available.

Whatever car you plan to buy, be sure to shop around to make sure that you get the best deal available.

Selecting a used car increases your chances of finding better loan deals. By choosing a reputable car supermarket and avoiding untrustworthy car dealers, you can increase your chances of finding your ideal vehicle at a much cheaper price. An approved car supermarket will offer many car credit services, enabling you to find easily something that suits your budget.

Opting for a used car not only enables you to have quicker access to your ideal vehicle but also allows you to save money on insurance. The insurance fees for a used car are significantly lower than the fees for a new car because the value of a used car is lower.

Selecting a used car enables you to spend the money you save on extra items. If you find a used car that ends up costing less than the budget you set, then you have the freedom of spending the extra money on other items, such as accessories for the car. This is ideal for those who need to use the extra money for accessories such as child seats or air conditioning.

Using comparison websites and determining what car supermarkets are available will increase your chances of locating your ideal used car at an affordable price. 

Cash

If buying a used car privately, cash is preferred and often expected.  You should be aware that there are risks involved in carrying large amounts of cash and that there is little comeback if anything goes wrong.

Cheque or Banker’s Draft

Cheques pose no problem when buying from a dealership, but a private seller will probably not allow you to take the car until your cheque clears.  A fee is payable in order to raise a banker’s draft, but they are more preferable than cheques, as there is no waiting involved for the funds to clear.  The seller will probably want to check that it is legitimate, so ensure you have the contact details of the bank to hand.

Credit or Debit Card

It would be wise to inform your card issuer of your intention to make a purchase of this nature, as such a large amount of money being put on a card could raise alarms over potential fraud.  Be wary of buying a used car using a credit card, because unless you can clear the balance at the end of the month, you will incur interest at a high rate.

Personal Loan or Dealer Finance

Before entering into any long-term car finance agreement, ensure you have researched the costs thoroughly, including any early repayment penalties and charges incurred for missing payments.  A secured loan, often against your house, is usually cheaper, but your home is at risk if you do not keep up repayments.

Below are some easy ways to pay back your car loans without destroying your credit.

•    First you need to obtain an honest evaluation of your car so that you know how much to list your car for.  It is advisable to list it a few hundred pounds higher so that there is some room for negotiation

•    Next step is to subtract the selling price from the loan value and ascertain the exact amount that you need to pay to the bank.  Inform the bank of your intention to sell the car and gather the log book and other relevant documents

•    The next step is the difficult one.  Should there be a difference between your loan amount and the selling price, you might have to either dip into your savings or take a short-term unsecured loan to pay off this difference.

•    Advertise your car online.  After finding a buyer, visit the banks, pay them their money, and clear the paperwork so that ownership is transferred promptly to the new owner.

Last, but not least, try to pay in cash for your next car, as it will help you with consolidating your finances.  This will also be immensely helpful when selling your car the next time.

Dealers will usually take a cheque if you prefer, but when buying privately this is often not an option, or if it is then the seller will almost certainly hang on to the car until the cheque clears with their bank. In any case, mistrust works both ways and they might clear the cheque and withhold the car.

If you want to spread the cost of a used Seat, used Suzuki or any other make of used cars, there are plenty of car finance options for borrowing available, but of course you have to check the APR (Annual Percentage Rate), the dealer will offer a rate but you needn’t accept it and you should get your own quote to help to negotiate their offer down.

Weigh up the monthly payments against the total cost of the loan and endeavour to borrow only what you need at the least cost. Financing through the dealer might well be the best way to go, as interest rates on small amounts could be lower than borrowing through a bank, and there’ll also be some room for haggling.

•    Car Insurance Group – new groupings were implemented in January of this year that expanded the old 20 grouping to 50.  Factors considered in the new grouping are: car engine performance, new car price, parts pricing and the vehicle’s security levels.  The point of the new groupings is to better estimate car repair costs for insurers.
•    Vehicle Price – although, this does not seem quite right since it is also used to determine the car insurance group.
•    Engine Performance – the higher the power, the higher the premium.  Again, this is also used to determine your car insurance group.
•    Age and Sex – women seem to be involved in accidents less often than men; younger drivers, with less experience, are involved in accidents more often than all other groups.
•    Your Place of Residence – simply put, if you live in a “high crime” area, you will pay more in premium.
•    Your Driving Record – a history of accidents will most definitely increase your premiums and could make you not-insurable.

As expensive as fully comprehensive car insurance may be; it may not be enough.  It is becoming more alluring to buy “gap insurance” to supplement your comprehensive car insurance policy.  New car values decrease rapidly from the moment they are purchased.  So, if you are in an accident, even though it may be shortly after your purchase, you insurer will be unlikely to replace the full value of your car.  Gap insurance will allow coverage for the difference between your comprehensive policy and the actual cost of a new car.  So, given the above, your car finance can be greatly affected by your insurance premium level.

A used car can still be a good option, even if you are able to afford a new one.  Spending too much on a new car, even if you can afford it, is unnecessary and you can easily find a decent second-hand car and save your money for something else.  Second-hand cars are also thought to be more reliable, mainly due to the fact that they have already been tested and used.  This will allow you to save money on repairs. However, it is important that you are provided with proof of maintenance and that whoever you are buying the car from is easy to contact, in case you experience any problems.

Another reason why a used car may be the best choice is that due to the fact that the car is second-hand, you are much more likely to find better car finance deals.  Car loan repayments may not be as high as they would be with a new car, allowing you to pay for your used car at a comfortable pace. 

People with fair to poor credit or no credit are often turned down for loans.  Obviously, the bank wants to make sure it is going to be paid and credit scores examine the odds of receiving payment on time.  There are some options when it comes to car finance even if there have been issues in the past.

The first thing for the potential buyer to do is to approach a personal bank.  Personal banks are more likely to issue a loan to a customer than to a stranger.  Chances will improve if the applicant’s account is in good standing.  If the applicant has no credit, the same theory holds true.  There may be a need for a co-signer but it is the perfect opportunity to create and build a positive credit portfolio.

If the applicant receives an offer that seems to be too good to be true, it probably is.  Many companies will offer loans at completely ridiculous rates.  Shop around to several lenders, preferably local ones, and see what is available on the market.  Finally yet importantly, the buyer should always read every word of the contract, especially the fine print, before the deal is signed.