ABOUT CAR FINANCE: Our responses to the most frequently asked questions

Do you want a new car? Want to purchase a car but not in full outright? You might be a good candidate for car financing! And how does it operate? Want to know more about car finance? Everything you need to know about car financing, including eligibility requirements and application procedures, we will cover in this guide.

How does car finance work?

Car finance is the only option available to people who need a new car but don’t have the money to pay for it in full.

We’ll make it as simple as we can for you because it’s also one of the trickiest parts of buying a vehicle.

Car loans operate similarly to other financing options. You make monthly payments to your lender over time. Additionally, they add interest to the money they lend you (known as the Annual Percentage Rate, or APR). Before selecting whether or not you consider your car finance options, it’s critical you understand how much interest you’ll be spending.

Our team could help show you what options are available to you when looking at car financing deals. 

What are the types of cars on finance?

There are numerous varieties of car financing. There are several options for leasing a vehicle. For a predetermined amount of time, you will make fixed monthly payments.

Your credit score will be clear of any fully paid charges at the end of the agreement. Generally speaking, paying off your car loan in full might help to improve your credit rating.

When it comes to vehicle finance arrangements, the two most popular options are:

Personal Contract Purchase (PCP):

  • Pay back the guaranteed minimum future valuation of the vehicle.
  • You can decide whether to keep the vehicle, give it back, or even trade it in.
  • If you decide to keep the car, you will need to pay a final ‘balloon’ payment.

Hire Purchase (HP):

  • You make a down payment upfront and the loan serves as collateral for the car.
  • You repay the total cost of the car over a specified period of time.
  • You own the car outright once you make the last payment.

Can I get financing for a car?

You’re probably wondering about car finance. Especially, if you’re eligible for it. The simplest answer is probably! Most lenders would probably approve your car loan application if you have a job and a steady source of income. However, there are also more elements that affect a person’s ability to obtain car finance deals.

  • Your credit score: Having a strong or exceptional credit score makes it more likely that lenders will approve your request for loans. Lenders might reject your application if your credit score is poor. But you shouldn’t let that deter you! We at Caryy may be able to assist you to obtain car financing despite having a low credit score.
  • How much money do I make?: Although it may seem obvious, your income might influence your ability to secure motor financing. This is because you will typically make monthly repayments in this manner if you have terrible credit. It’s wise to organise your finances before thinking about vehicle financing.

More about Car Finance with Bad Credit?

You can acquire car financing even if you have bad credit. However, the interest rate on your car loan will normally be greater. Because they are seen as being riskier, lenders try to protect themselves against borrowers who might default on their loans by charging them higher interest rates. Additionally, if your credit score is lower, you might be required to make a larger deposit.

The positive news If your credit is less than ideal, you can still get fantastic car finance deals! When we paired them with the appropriate lender, we’ve seen a number of customers who got a wonderful price.

However, unless absolutely essential, it’s always preferable to try and raise your credit score before making any car finance applications. CRAs (Credit Reference Agencies) offer excellent advice to help you to raise your credit score.

What about car finance with no deposit?

You can acquire a car loan with no down payment, yes. Your credit rating will, nevertheless, play a role in this. It’s more likely that lenders will approve your no deposit car finance application if you have a good credit score. This means that there will be no money put down at the time of purchase and instead, there are other methods to cover the costs.

It’s possible that lenders won’t provide no-deposit car financing if you have a poor credit rating. They don’t want to take a chance with someone who has a record of late payments. If your circumstances are similar and you genuinely want to get a new vehicle. We advise getting in touch with our staff if you don’t have any funds for a deposit.

Can I finance a car without a guarantor?

You can rely on a guarantor to assist with your monthly repayments if you are unable to do so yourself. You might delegate this responsibility to a relative or close friend.

It’s more likely that you will be approved for no-guarantor car financing if you have a solid credit score and steady income. You may get approved for vehicle financing without needing a guarantor if you are able to satisfy these conditions.

The good news is that perhaps we could also help. We know a lot about car finance and could help you find the best car finance deals. We might have access to lenders who will have a different perspective on your circumstances. Even if you’ve been rejected for car financing in the past.

Even if you have bad credit, having a high income will be your best attribute when applying for vehicle financing without a guarantor.

Can I get joint car finance?

If you frequently travel with a partner or friend, you may be eligible for joint car financing. Some lenders demand that you live at the same address as them as well.

The monthly payments for the vehicle are your responsibility and those of your co-applicant. If it’s likely that both of you will be driving the car, joint car financing is an excellent choice. It’s important to keep in mind that not all lenders will offer this type of financing.

It’s also important to keep in mind that some lenders might not provide joint car financing to borrowers with weak credit records or inadequate financial backgrounds. Be careful and use a broker who can assist you in finding the finest lender to obtain vehicle financing.

What’s the application procedure for car financing? Is my credit score important?

The best course of action if you’re interested in vehicle financing is to contact a broker. A broker will bargain on your behalf and locate the best car finance deals for your requirements. The process is simple:

  • Send your information over so we can get in touch. We’ll give you a call back and go over your options before moving forward.
  • Get a quote if you want to know what might be available before we begin.

To finalise…

We hope to have addressed the majority of your inquiries about car finance and how it works. If you would like to see what cars might interest you, use our car search tool to have a look. 

We are always delighted to answer your questions if you have any more. You can reach us by phone or online should you have any others!

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