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How to Use a Car Finance Loan
Few people can purchase a car outright, so loan lenders have created specific loans to help you afford the costs.
The loan application is a simple and straightforward 3 step process.
- Apply - fill out an online application form
- Identify - send off documentation as proof of ID and address
- Sign - sign and send back the contract and it's done
The whole process can be completed in a matter of weeks.
Making the most of your loan...
- Insurance
For a nominal amount each month you can protect yourself against the inability to meet repayments through accident, sickness or unemployment, which can be a real godsend if you find yourself unable to work.
- Choose the right payment plan
Make sure you think about your future options before signing up to a certain payment plan. If you plan on upgrading your vehicle every few years then you may be better off with a PCP plan, as you will be paying less money overall each month and rolling over the balloon payment at the end. But if you plan on keeping the vehicle for many years, you may be better off paying the loan in larger, more equal chunks, without the lump sum at the end.
Whatever your position, just make sure you consider your options and choose the best plan to suit your situation.
Things to watch out for...
- Shrewd salespeople
A salesperson in a showroom will undoubtedly be working on a commission based salary, meaning that the more he sells the more he earns. To maximise his pay check he will try and eke the money out of yours.
Go to the showroom with a clear idea of the things you need and not the things you want. A convertible Porsche may seem like a nice idea at the time, but you may regret it when you have to take the kids to school in January, or when you start making the repayments on it!
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