Things to consider when applying for car finance
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Paying for a vehicle, whether outright or with car finance, is usually the second most expensive thing you will pay for after a house.
That is why it is extremely important not to rush into a decision, and to take each step slowly with careful consideration.
When looking at car finance options there are a number of key things to do before making a decision. Don't leave any stone unturned and follow our tips on what to look out for when applying for car finance.
- Follow our tips on credit ratings. Your credit rating is a key factor in which finance deals are available.
- Make sure that you can afford the monthly payment comfortably over the entire term of the loan.
- Interest rates play a key part in getting a good finance deal, so make sure to compare them by looking at the APR (annual percentage rate). The APR includes all the charges you have to pay, and typically a higher deposit means a lower interest rate.
- Compare the total cost when it comes to borrowing, not forgetting all the charges over the course of the loan.
- Take into consideration that other charges may be incurred if you exceed the forecast mileage in personal contract purchase (PCP) or personal lease agreements.
- Consider what additional expenses may arise during the term of the loan. Will you be making any other big purchases, such as buying a house or going on holiday?
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For more tips on how to get the best car finance deal visit the Finance Tips section on the MotorPocket blog.