Just because you had prior financial problems it does not mean that there is not someone out there willing to approve a car loan for you. You just have to make out your case and show some realism in what you are asking for. If you simply need a car to get you around locally, work and the supermarket perhaps, you don’t need an SUV. When you show a lender that you are being prudent you will strengthen your case even more.
Think carefully about what’s really important
Your house is likely to be the biggest single purchase in your life but after that it is your car. While it is not something that can appreciate in value, a car purchase still requires a good deal of thought. You need to buy something that is suitable for your needs, reliable and economical if you are looking to not only have the convenience of a vehicle but also want to be certain you can pay back the loan.
Car finance with poor credit from online companies may cost you a point or two over the norm in terms of interest. The justification is the perceived risk in approving a loan for someone who has defaulted on some kind of credit agreement in the past. The important thing is the approval as long as you are dealing with a company that is regulated under the Consumer Credit Act of 1974. That means it is overseen by the Financial Conduct Authority (FCA) and the Office of Fair Trading.
History not the priority
Good online companies are more concerned about your ability to repay any approved loan than your previous record, but you still need to be realistic. You are being handed a chance of finance and a chance to begin the repair of your credit history so it is vital that you do not try to over reach yourself.
Your lender will take a view based upon the information you submit and it is important that information is accurate and comprehensive. That way you should be borrowing an amount you can afford.
Get it right this time – it’ll cost you less next time
A car has become a necessity and a reliable one at that; it does not need to be brand new to be reliable and perhaps given your situation a good used car is the most prudent choice. If you have an old car to dispose of you are still better off selling it privately than trading it in. Even if the proceeds get you little more than the cost of your insurance that is something. Trading in a vehicle may result in an inflated purchase price.
There are monthly costs of running a car that you must take into account when buying a car. It is essential that you pay back your loan to help your credit status so you have to do your sums. It is too easy to get excited at the prospect of having a new car and forget some essentials. If you get your decision right you will find next time around you are not charged that little extra interest because you will have restored your credit history.