How to Choose the Right Car Finance for Bad Credit – Your Options Explained

Many people find it much harder to get finance for a car with bad credit than for example 4 years ago in the UK. Credit is really tight and people’s credit rating has gone down as well as lenders have changed the criteria for getting accepted for new car loans. Therefore you do have to do your research in order to be able to get a car loan with the best possible conditions and still be able to maintain a sound credit rating.

Getting a car loan is essential in order to be able to live the lifestyle we are used to, get to do what we have to do, go to work, and drop the kids off for school. As unemployment has soared in the UK there are less possibilities to find a job you can commute to by public transport, and you have to compromise. Although if your car is not reliable to use it every day, it is important to change it. Having a car in the UK is not a luxury any more, but a necessity, therefore you might need to look for car loans even if you have bad credit rating.

The options available for you will depend on your credit rating, some types of finance are harder to obtain with bad credit score than others, so the first stop is to get a copy of your credit file. Many things do affect your credit rating, if you live in the UK, financial companies do use almost automatic software to determine if you can get a car loan and don’t really like lending new money for people with bad credit.

1.   Personal loans for bad credit

You might want to finally own the car you are buying, therefore you want it to be registered on your name,instead of the finance company’s. But it is a higher risk for the lender, therefore you do have to have a sound credit profile to get an unsecured personal loan for bad credit, also you have to remember that the interest rate might be higher than you are used to. Although many companies do offer personal finance with bad credit rating, you do have to shop around to make sure you will get the best deal available.

2.  Hire purchase agreements for bad credit

Many big loan houses and banks do also offer Hire Purchase agreements. These car loans are more suitable for people with bad credit. Also the interest rates are likely to be much lower than on unsecured finance. Although you do have to take into consideration that the car is still going to be owned by the bank until you paid off the last installment of the car loan, you will just become the registered keeper of the vehicle. The other disadvantage of this type of car finance is that the bank can take the car back any time if you do not keep up the repayments.

3.   Dealership deals for bad credit

If you take out a finance from a dealer, you have to know that it is still not the car dealer company that is going to offer the finance on the car, but a bank. Car dealers are signed up for schemes with different banks and finance houses to provide car loans on their behalf and earn a commission on the finance. Although it is generally easier to get a car loan from them, you do have to remember to cross-check the prices, many car companies do build in the interest in the price, although offer zero percent credit on loans for people with bad credit.

Incentives For Car Buying

Incentives for car buying are huge right now with the government offering car buying incentives; incentives offered by the dealerships themselves and with the slow economy, advertisers are hitting the market with more AdWords that brag about great deals. Shopping for a new or used car, or even leasing a car can be quite a game. There are thousands of “cash back incentives and rebates on most of the cars available today. But the real incentive is knowing how to deal with the salesman and dealers themselves.

The car market is crowded and competitive and many would tell the consumer that now is the perfect time to buy. But don’t let these times fool you. Many of the sly marketing techniques and sales incentives on selling cars are also set up to make their piece of the car incentive pie. The wave of incentives can be attributed to the move of many countries, Germany, France, Slovakia and the U.S. to launch incentives for auto buyers to turn in their old fuel-guzzling vehicles and replace them with more environmentally friendly models. But what if you do get some sort of rebate or incentive that does not come near the trade in value or the cost to the vehicle you drive today? There is still more you can do to incentivize your purchase. One way to literally beat the dealers at their own game is knowing what tricks they use to sell you a car. One great site that offers secrets to dealing with the ‘dealers’ is finding out about the car dealer secrets and best ways to beat the salesmen at their own game.

Before you go to the dealership of your choice, it is wise to arm yourself with government incentives but even more productive would be to align yourself with the knowledge of dealing with the dealers to beat them out of literally thousands of dollars. This can be done easily if you know what to look for, how to talk and what to reveal and what not to reveal. Did you know there are certain days of the week to buy a car that will save you thousands of dollars? Here are a few more things you should know before you walk into the dealership of choice.

-Why “hiding your trade” until negotiating your new car is flat-out wrong – How they can still pump the profits right back into your deal (and with a vengeance).

-How to get the best financing rate that you qualify for – Dealerships routinely bump your true financing rate by 2-3 points. Find out how to get them working for you.

-The #1 way to get the most for your trade from a dealership – This alone can save $2000 or more when you’re dealing with a trade-in.

-How the “no hassle pricing; system works, and how it sets you up to pay even more money – The price of the new car is only a tiny piece of the puzzle. See the other angles the dealer works in to re-coup the lost profits… and then some.

-Save up to 56% on your new car accessories -This simple trick can add up to fast savings, while still getting manufacturer-quality accessories.

These are just a very small portion of what you will need to make the deal. So, car buying incentives are good, but dealing with the dealers are better!