Through car financing, it makes affording the car way easier as you'll be paying monthly payments. This would actually help you get a far better car and then stay in your budget range too.Reading Time: 4 minutes
Over the years, the advancement in car financing has made purchasing cars way more easier as before you had to save up for quite a long time and then you’d be able to get some car and still probably not your dream car. Through car financing, it makes affording the car way easier as you’ll be paying monthly payments. This would actually help you get a far better car and then stay in your budget range too.
There are many different types of finances that offer you different deals and cost of monthly payments. Obviously after researching you can choose which one would seem the best for you depending on how long you want to continue the monthly payments for, or whether you want to keep the car at the end or just return it.
Since there’s alot of competitiveness in the finance world, so they provide with many incentives and some even provide 0% APR which is also known as interest-free credit, of course they balance this with greater price of the car.
Steps on buying a car on finance
1. Compare the right interest rates
There are actually two different types of interest rates when you begin looking at finance agreements.
- Base rate, this is only the price or interest that is charged on your loan
- APR interest rate, now this is the actual price of the entire agreement which will include all charges like arrangement fees etc.
So whenever you’re comparing between a few finance providers, compare through APR rate so no fact or cost is hidden from you from the beginning.
With Aim Motors, you can choose from top Finance providers and get an instant decision on your online finance application.
2. Calculate the total amount to be paid
It is very important to start adding up different additional costs to the price you think you’ll be paying to your finance provider. There are many costs that we tend to ignore when we start looking at car deals, just because a deal seems cheap to you in the start doesn’t mean it’ll remain cheap when you add up the amount to be paid every month with the compulsory fees at the end etc.
Things you should also look at whether 0% finance on new car would seem more beneficial to your or getting a higher interest on a better incentive on the price.
With the Car Finance Calculator on Aim Motors Website, you can calculate your numbers instantly before finalizing the deal.
You should keep in mind that there are many restrictions when you get the car on finance like a set amount of mileage that cant be exceeded, so in this way if you do exceed the limit, you’ll have to pay additional.
If your final decision at the end is to buy the car and own it, you need to add the optional final payment that you would have to pay at the end to your total cost.
3. Leasing or buying?
This is something that you need to consider strongly when you’re opting for finance. Of course there are 2 ways that you could go ahead with:
Now this is the option you should go with if you want the car only for a couple of years or maybe want to leave City, country etc later. Leasing would be beneficial for you as you could use the car all along and later have no stress of reselling and simply return it once your agreement is over. However, you’ve to consider that when you choose to lease a car, you’ll have to face the restrictions as the car won’t be yours no matter what or how much you want to keep the car at the end.
Once your agreement has ended, you could simply opt for leasing another car.
Make sure there is no damage to your car or you’ll have to pay the price for the damage as the car won’t be yours.
If you choose to buy a car and want to keep it for a longer time but don’t have the money to pay a lot amount in monthly payments then choose HP finance as it does give you a better benefit and at the end you can pay the small amount to your provider and keep it.
4. Credit score
Try to have a good credit score as it will benefit you a lot when you choose to finance a car through credit rating. As many lenders do look at your credit score to decide what would be the risk of giving the car to you.
If you’ve a high score then they will provide you with lower monthly payments and then also give you low interest rates.
This doesn’t by any means mean that you can’t buy a car with bad credit. All you need to show that you can pay the payment on time and you’re good to go.
What happens if you crash the car you bought on finance?
Most finance companies, actually require you to have your car fully insurance as through this way any damage that would come to your car would obviously be covered.
Aim Motors provides 6 months comprehensive warranty and 1 year AA breakdown cover with each sale.
When your car is completely damaged, then insurance payout will provide the money given to the value of that car during that time frame. Obviously, this money will go out the finance provider, as you won’t be the owner of the car.