Car Finance Mistakes and How to Avoid Them

Planning to buy your next vehicle with car finance? Hold your horsepower for a moment. Before you rush off to find the car of your dreams, there's one pretty important thing you need to take into account: potential car finance mistakes. Many people get so revved up about the prospect of a new set of wheels that they forget to consider the financial implications properly. As a result, they end up making some pretty costly mistakes. Worry not, though. This guide features handy advice on how to avoid making the wrong decisions regarding car finance. 

Mistake One: Forgetting about the Deposit

Don't forget your deposit. It's easy to get carried away with the excitement of buying a new car and overlook the importance of a down payment. A larger deposit reduces your loan amount and monthly payments. Of course, getting a car on finance mitigates the need for an expensive upfront payment, but a healthy deposit brings down your monthly repayments to make the loan more affordable. Every penny counts when you're financing a car, after all.

Mistake Two: Not knowing Your Budget

Now we come to the age-old mistake of not calculating budgets properly. We've all been there, caught in the headlights of a shiny new motor, only to realise that we've bitten off more than we can chew. But don't worry, as you can avoid this by using our handy car finance calculator. Just plug in the numbers, and it'll work out how much you can afford. So, before you dive in headfirst, take a moment to figure out how much you can afford on our calculator page to avoid going over budget.

Mistake Three: Not Researching Loans and Lenders

It's essential to research different loans and the lenders offering them before you commit. Finding the right car finance option is a bit like searching for a teeny-tiny needle in a giant haystack, but it needn’t be a stressful situation. So don’t just take the first offer that comes your way. You can always make car finance super easy with Carmoola. Take a look at how it works and discover your budget in just 60 seconds to see how much you can borrow. 

Mistake Four: Only Focusing on Monthly Payments

It's easy to fall into the trap of focusing only on monthly repayments – after all, a low monthly payment sounds like a good deal, doesn't it? But that may not always be the case. Other factors, like the length of the contract and interest rates, can dramatically affect the total cost of your car. 

It's a bit like only looking at the price of a holiday without considering the travel insurance, meals and those must-have souvenirs. So, remember to look at the bigger picture when considering your car finance options.

Mistake Five: Falling in Love with the First Car You See

Finally, we come to the fatal attraction of falling in love with the first car you see. We understand the excitement of buying a new car, but it’s a great idea to look at your finances first. You don’t want to miss out on your dream car because you can’t afford it. Remember, there are plenty of vehicles available. Don't always go for the first one you lay eyes on. Take your time and be patient before committing to a new set of wheels. 

Bonus mistake: Not Considering Your Credit Score

A good credit score can open up better finance deals, while a poor one may limit your options and see you rejected for car finance in the worst-case scenario. So remember to check your credit report before applying for car finance. A bad credit score doesn't mean all is lost, but things are just a little bit easier when your credit rating is good to excellent.

I’ve Got 99 Problems, But Car Finance Ain’t One

Use our tips to feel more confident about securing car finance and avoid making the mistakes that many drivers experience when financing their vehicles. You'll feel more confident about your decision and can cruise through finance on the way to getting the keys to your shiny dream car. And remember that you can get your car loan with Carmoola. Happy driving!