Top car loan sourcing tipsDon’t be intimidated by the task if looking for a car loan. Follow these car loan sourcing tips, and you will find the right finance deal for you.
Don’t be intimidated by the task if looking for a car loan. Follow these car loan sourcing tips, and you will find the right finance deal for you.
• Shop around on a specialist motoring and car insurance website
To find a suitable car loan for your circumstances, you can gather information and compare prices most easily on the internet. A specialist motoring site is often a good place to look, as it will have already whittled down the selection of lenders to those who are prepared to offer loans for the purpose of buying cars (as opposed to loans which must have another, defined purpose).
• Secured or unsecured?
If you are a homeowner you may have the option of taking out a car loan that is secured on your property. The interest offered on such deals is lower than unsecured arrangements. However, this is not a step to take lightly, and you should take specialist advice before giving security on your home, as it is at risk from repossession if you fall behind on your repayments.
The most important of all car loan sourcing tips is that you must stick to your budget. Sit down with your bank statements and work out how much you can afford each month. Don’t forget to factor in insurance, tax and fuel costs when deciding whether you can afford to buy a car.
• Compare interest rates
Comparing interest rates is easy online, as all the information is there in front of you. The rates listed will be the lender’s standard rates, which may go up or down depending on the amount you want to borrow, and on your credit rating.
• Improve your credit rating
Your credit rating is what the lender uses to decide whether to lend you any money, and if so, at what rate. The higher the risk you pose, the higher the interest rate they will quote you. You can keep your credit rating high by paying bills on time, and checking your credit history to check that the information they hold on you is correct.
• You’ve got to haggle!
Finally, the car loan sourcing tip that could save you the most money is to try haggling. It’s always worth asking whether a lender will improve on their interest rate – especially if you have done your research and can tell them what rates other lenders are offering. You may not be successful in getting a reduction, but it’s certainly worth a try.
Posted by Edwin Miles on