Are there better finance deals for safer drivers? Not exactly, but here at Carmoola, we try and make the car buying process as smooth as possible, so, if you want to cut down on your insurance costs too, then this blog post is for you! 😀 Many insurance companies will offer great discounts if you are a safe driver, and you're happy to have a dash cam or "black box" installed in your vehicle. So do shop around for that!
Now, moving onto car finance which is why you guys are here today. Different car finance companies offer a number of packages that are available to drivers of all types. Whether you need zero deposit deals or 3 years free insurance car deals, car finance companies have something that will suit your needs. Even if you are looking for new driver finance deals, there are plenty of finance cars with free insurance for first time drivers out there, so you can get on the road as quick as possible. 🚗
If you want to save as much as possible on your car purchase, we’ll show you some of the things you can do that could help!
How to Get Car Finance Discounts
Thousands of car buyers per year in the UK get car financing when buying a vehicle because it turns a big purchase into smaller more manageable ‘chunks’. However, not all car finance deals are good. Some lenders charge higher interest rates than others. If you don’t take the time to compare different offers, you may not get the best car finance deal for you. As with everything important in life - do your research, forewarned is fore-armed!
If you ever find yourself in a situation where you don’t understand the car finance terms or things aren’t clear to you, be sure to ask questions. Maybe the lender or dealer is too pushy in their sales talk and you feel stressed so don't think you can’t say no. Remember that if you don’t feel the deal is good enough for you, you can always walk away. Sleep on it. Don’t sign the first car finance agreement that falls into your lap. Review every detail of the lender’s car finance deal, and make sure you choose an agreement you feel comfortable with. 🛋️
Get A Used Car on a PCP Deal
The popularity of PCP deals are largely down to the fact you can get used cars on finance for even lower monthly payments! This is because you can choose to give the car back at the end of the term, rather than paying the large "balloon" payment to make it yours. HP deals will cost slightly more per month, but you do own the car at the end of the term. New cars are always decreasing in value, especially in the first three years. So financing a ‘nearly-new’ or second hand car is a popular with a lot of our customers.
Here at Carmoola, we actually provide car finance for cars up to 100,000 miles, so if you are looking to get your hands on a new car this year, you might want to get an idea of the different payments needed to borrow a certain amount - in which case, check out our car finance online calculator !
Learn How to Negotiate
Don’t think that the car dealership finance is the only way to go! As will all purchases, a good tip is always - shop around! 🛍️ Yes, it can be super convenient to have everything in one place, but it is in their interest to choose a car financing package with them. They often make around 15% of the vehicle value off one deal, so make sure you do shop around, and use the art of negotiation to use other companies against each other. Tell them what other companies can offer, and because they want the sale, the dealerships are likely to go lower than what you originally expected. But more about that later!...
Before you buy your car, you’ve probably spent a lot of time shopping around for the perfect vehicle for your needs. Don’t hesitate to spend the same amount of time shopping for a car finance company. Whilst some dealerships also offer car financing, you might find better deals elsewhere. And of course don’t just go with the first dealership that springs to mind, as that company might not necessarily offer the best deal for you. You might find the same car at a better price on line or at a neighbouring dealership.
If you know how to negotiate well, you can try to get a good deal from them. Understand their offer and look into the things you don’t need. You can then be firm with the dealer that you only need the basics and want to remove any add-ons, if that is how you want to go. It’s one way to cut your expenses while getting car finance from the dealership. If you're not confident, take a friend or family with you for support! Remember, everything in life is negotiable, sleep on it, and make sure you can't do better elsewhere.
Choose a Shorter Loan Term
Yes, it does make your monthly repayment amount much more affordable, but in the end you are actually could be paying more than what the car is worth in the long run. That is definitely something you want to avoid. In the case of any loan term, a larger chunk of your money goes towards paying the interest, and if you are borrowing that money for a longer period, you will pay more overall in interest So, while a longer car loan term seems enticing, it’s not always the best thing to go for if you can avoid it.
Now this leads me into APR. APR is the interest rate plus any other charges the finance company might add on. So this will give you a good starting point for comparing like for like with different companies. And always view the total amount of interest you would be paying back over the full term of the loan. Obviously this will be more for longer term loans.
Check your finances to see how much you can afford to pay for your car every month without hurting your budget. Choose a loan term that will match your estimate. As mentioned before; if your financial situation allows it, pick a 3-year car loan term. The shorter, the better, because you'll pay off the car faster and will have more options - keep the car, sell the car, trade it in for a new one... And if you've got some savings, you may want to contribute some of these as a deposit amount. This will help in keeping the monthly repayment amount lower.
Look for Low-Interest Car Finance
Car financing is essentially borrowing money so you can get the vehicle of your choice, and with this loan comes the interest you have to pay the lender. Earlier we spoke about how longer term loans affect the amount of interest you pay, but interest rates from different car finance companies may vary. Make sure you are shopping for the ones that offer the lowest rates/APR.
A great way to decrease the amount of interest paid is to primarily check your credit score. This is crucial to your car finance application because it can affect the interest rate that the car finance company will offer you. If you have an excellent credit score, you can try negotiating for a lower interest rate. It wouldn’t hurt to ask. They just might grant you a better car finance deal.
But what if your credit score is poor? If this is the case, you may find it difficult to get good deals. However, this doesn’t mean that it’s impossible. Sometimes, lenders who offer car finance for bad credit have very high interest rates. But there are so many UK car finance companies to choose from, so don't just stick with the first one you find. It may just take more time shopping around for good car finance companies and comparing interest rates.
Don’t Feel Compelled to Take the Deal
You can always just say; ‘I need time to think about it’.
Take it from us when we say you won’t have half as much fun driving your new car if you're wondering that you could have negotiated a better deal elsewhere. Getting a great deal is the core of British culture, so spend as much time researching and getting that perfect deal as you would hunting for that £1 pack of tea bags. If your car finance payments are a big strain on your budget, having a car could end up feeling more like a burden. That’s why it’s so important to do your research on different lenders and car finance companies before signing any contracts.
Keep in mind that no matter how pushy the sales tactics are, they can’t force you to take the deal. You always have the final say if you want to get car financing from them or not. If the interest rate is too high, the car loan term is too long, or they keep on asking you to get add-ons you don’t need, and you’ve negotiated with them as best as you could, don’t be afraid to step away. There may well be a better car finance deal out there for you. And be aware that if a dealership is trying to sell you a third party finance deal, it's because they will get a commission - and you of course will be paying for that in some way.
So although we can't honestly say you might get a better finance deal for being a safer driver, you could get cheaper insurance, and you are less likely to end up paying extra for damage at the end of your PCP or car lease deal. But that doesn't mean you shouldn't shop around for the best finance deal you can find too.
With the current number of car finance companies in the UK today, you’re sure to find one that suits your needs. If you are a new driver or you have been driving for years, you can get deals that suit your specific affordability. Remember to take your time when doing your research, learn to negotiate, and don’t get pushed into signing a car finance agreement that you don’t feel comfortable with.
If you are looking for car finance, look no further. Carmoola is an accessible, inclusive and straightforward app that helps people like yourself get the car financing deal of their dreams. Simply apply on Carmoola, enter your details and verify your ID, then see an illustration of what you could potentially borrow, over how long, and what it would cost, both monthly and overall.
It takes a few minutes, any time night or day. No need for paperwork, phone calls or interviews. Then simply apply, and once you are approved, find your dream car, and you can simply pay with your virtual Carmoola card at the dealership! What’s not to like? 😃
For more car finance tips, check out other informative articles from the Carmoola blog!