The car buying experience can be a straightforward process when you have affordability and good credit history. If you are fortunate enough to be able to buy a car outright, this is even simpler, but for most people, car finance options will need to be discussed. However, many lenders are aware that having a perfect credit history is not a given and a customer’s affordability and budget can vary. If you are currently looking for car finance UK lenders, here are our 3 top tips that can help make getting approval simpler.
- Check Your Affordability First
No matter how good or bad your credit score is, if you cannot afford the repayments required, you will be declined long before your application has had a chance. The best way to ensure you have a chance of approval is to check your affordability first. Rather than applying without any idea of what you can afford, take the time to review your essential outgoings against your total income. By knowing your approximate disposable income, you will be able to apply with confidence knowing how much you can afford to pay towards car finance repayments. Some lenders may require to see copies of your bank statements, especially if you have poor credit, so you will need to ensure you consider all outgoings and separate the essential payments with non-essential spending. This way, the lender will be able to see exactly what you can afford to pay without falling into financial difficulty.
- Don’t Apply with Multiple Lenders at Once
Whilst it may be tempting to apply with multiple lenders in the hope one will come back approved, doing so can impact your credit file further. Applying for numerous car finance applications in too short a space of time will not only reduce your credit rating, but it can increase your chances of further declined decisions. This is because a lender will be able to see your application history when accessing your credit file and may view multiple applications over a short period as desperate. It can be natural to be declined and move onto the next lender straight away, but it is better to take your time and apply for the right lenders. If you already have poor credit, for example, seeking out car finance lenders who can help you and your circumstances should reduce the need for multiple applications.
- Carefully Consider Your Options
There are many different types of car finance lenders available as well as multiple types of finance. It’s important to carefully consider your options before starting to apply as once approved, you will be contracted to maintain repayments for many months or years. Finding the right option for your circumstances will ensure the finance remains affordable in the long term. Whether you are buying a used or brand new car, taking the time to understand the different options available, from bad credit car finance, personal loans, Personal Contract Purchase (PCP) or even Hire Purchase (HP), you will be able to make a considered choice rather than a rushed one. This will also ensure you choose a lender that is trusted and authorised by the Financial Conduct Authority (FCA), working to responsible lending guidelines that ensures your application is treated fairly. When it comes to car finance, it is better to be safe than sorry, so always choose a legitimate lender.
No Comments