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The top 3 tips of car finance

There are many factors that you will need to bear in mind when you want to finance a car purchase. It can be confusing as there are different ways to finance a vehicle. The most popular choices for taking out finance include a secured or unsecured loan or taking the hire purchase option that the dealer offers you. Here are the top 3 tips of car finance that could be taken into account when deciding on the most suitable deal for your needs.

There are many factors that you will need to bear in mind when you want to finance a car purchase. It can be confusing as there are different ways to finance a vehicle. The most popular choices for taking out finance include a secured or unsecured loan or taking the hire purchase option that the dealer offers you. Here are the top 3 tips of car finance that could be taken into account when deciding on the most suitable deal for your needs.


One of the first top 3 tips of car finance is to search around and compare the different choices you have for finance. These depend to some extent on whether you are buying from a private seller second hand or if you are buying either a second hand or new model from a car showroom. Of course the type of car finance that could be most suited to you will of course depend on your credit file. Your credit file is what all lenders take a look at whenever you apply for credit of any kind. If you have a poor credit rating then you might have no alternative to take out a secured loan or you could even have to take out a bad credit car loan. If buying privately then you could look into the differences between a secured and unsecured loan. Buying from a showroom means you could take hire purchase or a personal loan.


The second tip when looking for car finance will be in relation to taking out a loan as your means of finance for your vehicle purchase. A secured loan will mean that you have to secure something of value against the amount that you are borrowing. If the vehicle of your choice is a brand new top of the range model and you have to borrow a great deal of money then you might have to take out this type of loan. You will usually be able to spread out the repayments of your loan over a longer period of time which means that the monthly repayments could be lower. An unsecured often means that you cannot borrow as much money and you could have to repay the loan the loan back quicker than you will with a secured. However there is nothing to put up as security against the borrowing.


The third of the top 3 tips of car finance will be if you have chosen a loan as your means of paying for your vehicle, then it is essential to find the best deal. The rates of interest can vary greatly with providers and a saving of even just a percentage on the rate of interest can save you a great deal of money over the term of the loan.

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Back to June 2009

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