Car Finance Options
Examining the different ways of financing a car purchase
<<< Introduction to car finance options
Poorer Credit Loans
If you have some form of bad credit in your financial past - missed payments, arrears, or defaults for example - then you'll probably find it tricky to get your loan application approved at one of the normal high street banks or online lenders. However, some companies will happily lend to people with adverse credit ratings, although generally at a higher cost. Examples of companies specialising in bad credit car loans include NetCars and Accept Car Credit.
National Networks
For people with worse credit histories who find it difficult to get any unsecured finance at all, it's worth looking at one of the companies who will supply both the car and the finance to pay for it. An example of this kind of company is Approved Car Finance.
Your choice of car will be limited to one of the hundreds they have in their range, and cars will usually be at least a year or two old, and you'll also be limited to companies who have a showroom in comfortable travelling distance.
These companies will approve nearly all applications, but will charge a fairly hefty interest rate in most cases. Still, if you're genuinely struggling to get a cheaper form of credit, then it's an option to look into.
Secured Loans
The final finance option, for homeowners only, is to take out a secured loan on your home. As this can place your home at risk if you fall behind with repayments, it should be considered only as a last resort - it's probably better to get a cheaper car with more expensive finance, using one of the national networks, than to splash out on the car of your dreams secured against your home.
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