How to Find the Best Used Car Finance Deal?

Thinking of buying a second hand car? 🤔 When shopping for a secondhand car, you’d want to find the best one that can match your budget and tick as many boxes as possible when it comes to your expectations. The same goes when you’re looking for lenders offering the best used car finance deals. If it’s your first time financing a car, you might feel clueless and don’t know where to begin. For many car buyers, it’s easy to identify the car they want — the make, model, colour, trim level, and so on. But with car finance deals, how and where will you even start, right? Let’s answer that!

What is a good used car finance deal? 

The best used car finance deal would be the one that fits your situation best. Does it allow you to buy the car you want, have a reasonable interest rate, and a monthly repayment amount that you can afford to pay consistently? You’d want to have a car finance agreement that will allow you to drive a good car without ruining your budget and affecting your lifestyle significantly.

That’s why it’s important to do your research first before signing any contract with a lender. Know your income and how much of it you can set aside for the monthly car finance repayments, and whether you have funds set aside for a deposit.  Find a suitable car that fits your budget, choose a repayment term you’ll be comfortable with, and finally, look for the best car finance company with the lowest APR

Low Annual Percentage Rate

What APR should you look for? The lowest possible one. Realistically though, the APR that will be applied to your loan depends on your credit score. If your score is outstanding, you could probably get car financing at 6% to 11% APR. For average scores, the more usual rates are around 12% to 19%, while borrowers with poor credit scores typically get APRs of 20% and up.

The key thing to remember is the higher the credit score, the lower the APR, and vice-versa. That’s why it’s highly crucial to have a high credit score by maintaining a good credit history. You can achieve this by paying bills and loans on time, keeping your details up-to-date, and not making too many credit applications within a short period. 

A Repayment Term You’re Comfortable With

Should you get short-term or long-term car finance? Ideally, short-term car finance agreements are better because you’ll be borrowing money for a shorter amount of time, so it means you’d be paying less interest than if you had a long-term deal. However, be aware that the shorter the agreement term, the bigger the monthly repayment amount. But as long as your income can cover the payments, then this should work out fine.

For long-term car finance, you’ll pay more interest overall, but if you need the monthly repayments to be a lot more affordable, then there are agreements that allow borrowers to repay the lenders throughout a five-year period or sometimes, depending on the lender, even longer, like seven years.   But of course the age of the car will be taken into account too. 

Discounts Would Be Nice

An great example of a car finance discount would be the 0% APR deal. This is usually offered by dealerships with the aim of moving their inventories more quickly, so expect a limited selection if you’re looking for 0% APR car finance. There are also other discounts, like a deposit contribution from the dealership if you buy a car online, and they may also offer free delivery. If you buy a car over the internet and choose to get it delivered to you, you’d typically have to pay a fee.

Discounts are really nice to have, but just be extra careful of any add-ons and upgrades that might be suggested here and there. It's always worth exploring and negotiating! Never forget to read and understand the fine print in your contract before signing.     

Where can I get good used car finance deals?

Once you know what you want to get out of your car finance agreement, it’s much easier to find the best car finance company for you. The fastest and most convenient way of looking for the right lenders is to go online and do a search on the “best car finance companies UK”. You might be overwhelmed by the number of lenders to choose from, both online and more traditional lenders. so you may also want to go to car finance comparison websites. You can compare the offers of different car finance companies at a glance.

Review sites can give you an idea of what to expect from lenders when applying for car finance. Online forums can also be helpful. You can read about people’s opinions and experiences in getting car finance from certain lenders. 

Are there better used car finance deals online?

Some traditional car finance companies, banks, and other financial establishments may offer discounts if you apply online. If you’re not sure and are thinking, “Is online car finance right for me?” Don’t worry. Many car buyers prefer to do the whole process online — from applying for car financing to buying the car. It’s much more convenient, and you’ll get the result of your application fast, just like with Carmoola. 

Want to know if you qualify? Download Carmoola on your phone and get started! You only need a few minutes to type in your details and follow the prompts. Once you’re done, you’ll know the result almost instantly!

And don't forget, if you are buying a second hand car, make sure you do all the necessary checks on it's history, any outstanding hire purchase agreements, it's documentation etc. And do a test drive if you can! 👍🚘