Want to buy a car but don’t want to spend all your savings into buying one? Then it’s time to apply for car finance. People who haven’t availed the car financing option view it as some kind of a taboo as they themselves are perplexed about the process of buying a car with bank’s money.
Availing financing for a car is popular in the UK. This can be verified by the fact that the car financing market grew at around 17% by value when compared to the corresponding month last year. Not only the car financing market has witnessed growth, also car sales in the UK hit record highs in 2015. If you too are looking to buy a car, here are some steps that will help you avail the car financing option.
Determine the Amount You Want to Borrow
You should never borrow the full amount to finance your car. You should rather put some of your own capital as well. This is known as down payment. The higher the down payment the greater is the chance that you’ll get favourable rates on your car financing option. So first choose your dream car and then determine how much money will you be able to contribute. This will help you in determining the amount you want to borrow.
Look for Various Other Financing Option
Banks, credit unions, online lending sites and even insurance companies will be willing to provide you car financing but you should always look at all the options and choose one that gives you most competitive rates on the car loan. Traditionally only the banks were able to provide car financing to their customers but now, many online lending sites are able to connect borrowers with lenders and are providing financing at a much lower rate than the banks.
Organize Your Documents
No one will lend you money blindly. The credit officer at every lending institution will be responsible to assess your creditworthiness. This is why you will be required to submit various documents through which your financial health could be determined. These documents will help gauge the credit officer your net worth and the credit risk associated with you which will determine the cost of funding.
Get Ready to Negotiate the Rate
Nobody is going to put a super competitive rate on a silver platter and offer it to you. You have to negotiate the rate and the best way to do it is by using your credit score. If you’ve been paying your bills on time and have sufficient amount of capital in the bank then you should be confident in negotiating the rates.
If you are availing car financing from an online credit provider then the process will be pretty straightforward as you will be able to receive financing by using your smartphone while lying on your bed. However, if you want car financing from a bank then it may take up to some days for your credit application to be processed.