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Car Credit Explained

Buying a new or used car is normally your second most important purchase after buying your own home. And just as when buying a property, it is very unlikely that you’ll have the cash readily accessible with which to buy your new vehicle. That is why many people turn to car credit as a way of getting the motor they want.

Buying a new or used car is normally your second most important purchase after buying your own home. And just as when buying a property, it is very unlikely that you’ll have the cash readily accessible with which to buy your new vehicle. That is why many people turn to car credit as a way of getting the motor they want.


So what it is? Car credit is another way of saying ‘car finance’ or ‘car loan’. Basically, you are taking out credit in order to purchase a vehicle.
So, if you are looking for a new or second hand car, what are your finance options?


Firstly, you can look at taking out forecourt finance. However, this type of car credit can often come at a high price, as you are paying for the convenience of buying a car from the dealer who is also arranging the finance for you. If it is an independent dealership as opposed to a manufacturer’s dealership, the standalone dealer may also add his own bit ‘on top’ of the cost of the borrowing, so that he makes a bit of extra money.


In these cases it could make more sense to source your own car credit such as via a car loan or personal loan. You could get a much more attractive interest rate as you are not paying the middleman.


And having your own car credit in place before you go to a dealership also means that you can often negotiate a better deal on the car, too.
Finding car finance doesn’t have to be difficult either, with all the major banks, building societies, as well as specialist car credit providers, offering loans. The easiest way to see what is on offer and to compare car loans is to go online.


There are websites that allow you to access a range of car finance deals, so you can cherry pick the one best suited for you. Look out for specialist motoring and car finance websites that package buying a new car and its finance together - because this is online, this means you can often get a good discount on your car credit.

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