Many people around the world choose to buy brand new, nearly new or used cars for a variety of different reasons. Brand new cars offer a number of benefits to their owners, such as not being owned by other people in the past and having a slim to none chance of breaking down during the first few years of ownership.
Nearly-new cars represent excellent value-for-money to those that want to be able to drive away from the car dealer’s showroom in a car that is less than 12 month old and has a small amount of miles on the clock but is still new enough to have that “new car smell” and perhaps more importantly, the reliability of a brand new car but not the depreciation of one! You can check this site to get more information about it.
And then you have used cars. Whilst they might not always be as reliable as brand new or nearly-new cars, they are considerably cheaper to buy than both of those options, making it an attractive proposition to those who want to spend as little money as possible on their motoring costs, or perhaps cannot afford the luxury of driving around in a brand new or newish car.
But what the vast majority of car buyers do that buy any of these types of car, is to pay for their new automotive purchases with a finance agreement of some description.
What is car finance?
In a nutshell, car finance refers to the practice of a financial institution lending a person some money to buy a car. This is usually done by a finance company rather than a traditional lender such as a bank, and the loan is secured against the car, rather than an unsecured loan that one might typically obtain from their bank.
Although a lot of people would attempt to borrow money from their bank, the problem is banks around the world are somewhat nervous about lending money to people due to the global economic crisis from the last decade, which was caused in part by people borrowing above their means.
This has meant that lenders have tightened up their lending criteria, and will typically only lend money to people with unblemished credit histories. So if you’ve been behind on a couple of your financial commitments in the past, you are more likely to be declined for an unsecured car loan from your bank.
Car finance, on the other hand, is much easier to obtain because the loan is secured against the car. This means if your payments to the finance company are irregular, they have the power to repossess the car from you, auction the car off and make you pay for any difference between what the car sold for and what you have paid so far.
Obviously you would not want to take on a car finance agreement unless you can absolutely guarantee that you would be able to afford to pay the car, even if things went wrong, so assuming that you have done your sums and can categorically state that you can afford to buy a car on finance, here are 7 top tips to help you get guaranteed finance!