Bad Car Finance

Buying a car can be one of the most stressful times in your life; the biggest decisions are normally “new or used?” and “cash or finance?”. In an ideal world everyone would be able to buy their dream car, brand new with cash but life doesn’t work like that. A lot of people have to resort to just buying any old car, that is within a low budget and they just hope that it’ll last them long enough to be able to afford another one – an endless cycle of new used car after new used car.

Getting a car on finance isn’t always the right decision for some people and you really have to look at the bigger picture when making this decision.

Monthly repayments

Can you really afford the monthly repayments? Buying an £800 car on finance might give you the nice manageable payments but how long will the car last? Will you still be paying for that car after it has gone to the scrap-heap in the sky?

A more expensive car will obviously come with higher monthly payments, sure it will (hopefully) last longer than the cheaper car but can you really stretch your budget that far?

When considering what you can afford, look at your spare money each month and aim for a repayment amount that will give you a little leeway should you need it. Most car dealers will be able to tell you what price range you will be looking at for your preferred repayment amount.

Bad Credit

If you have bad credit and need car finance, then your options could be limited. Not only are you less likely to get that finance but it’s also more likely, that if you do you’ll be paying a premium for it which will make the payments either higher each month or you’ll be paying them off for longer. It’s worth giving your credit report a check before you consider taking out any kind of finance to see where you stand, you can check it for free with a site like Noodle or one of the bigger names such as Experian or Equifax – these both come with a free trial but are chargeable afterwards.

Insurance

When looking into buying a car people often forget to check whether or not their insurance payments will change. The age and type of car can seriously alter how much you are paying each month, plus some insurers will charge you a premium for altering the details of your claim – check with them before buying any new car so you know where you stand.

Road Tax

Buying an older car can often lead to a paying a larger amount of road tax while many newer cars come with zero or basically zero costs; this is something you need take into account when calculating your monthly payments.

Buying a car is one of those things in life that really need careful consideration – unless money is of no worry to you of course. Make sure that if you’re buying a used car that you pay the proper attention to its history; its previous owners, any work carried out, its condition – so you’re not left with an old banger that has just washed your cash down the drain.

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