These days, nobody wants to keep on driving an unreliable car, and with the regulations and prices in the UK regarding the cost of tax on a lot of vehicles, many people consider changing their vehicles so that they will not be affected by the higher tax payments or simply because they need to drive a more reliable car. This article will discuss some options available for car financing with bad credit. Although difficult to obtain, it is still possible.
Options for Car Financing
Most people rely on financing to buy a new car because not everyone has saved loads of money. To finance a vehicle purchase, among the available options include dealership finance, secured loans, bank loans, PCP or Personal Contract Purchase, and HP or Hire Purchase. For people who have a good credit history, most options are available for them. Apart from having many choices, they also have a better chance of getting a good deal on their vehicle purchase. However, for those who have bad credit history, the situation could be really different.
Car Financing with Bad Credit
If you have bad credit, then your options for car financing are limited mostly from a car dealership loan or finance specifically aimed at people with poor or bad credit. There are many car dealerships that mainly target those who have bad credit. However, the APR or annual percentage rate (interest rates) on this type of finance can be costly. This means that your monthly payment may be really expensive. Aside from this, getting a dealership finance could also mean that you may have limited options on the vehicles that you can buy because you will only choose from the available ones offered by that dealership.
If you have tried looking into car dealership finance, but the interest rate is too high or you do not have many vehicle options, then you may consider getting a loan from a firm or lender, which offers car financing for people with bad credit. There are some advantages to going with this option, instead of car dealership finance. First of all, the APR can be much lower in comparison to dealership finance, which means you can save some money on your monthly payments. Then, obtaining a loan will allow you to buy a car through any car dealership. This way, you will have more options in terms of vehicles.
Finding a Lender
There are various lenders who offer car financing with bad credit. Depending on how bad your credit history is and your particular situation, you may be qualified to get an unsecured or secured loan. You may search for a lender online and find out if they specifically target those with bad credit. Moreover, remember to check more than one lender so you may compare their interest rates and any other terms and conditions on their loans. This will ultimately make sure that you will obtain affordable, if not the best, loan plan to finance your vehicle purchase.