The financial crash of 2008 affected most people around the world. Many debtors defaulted on various loans that had been made available to them which of course is always going to impact upon obtaining further credit.
If you’re still experiencing bad credit or are struggling to get back on your feet, there are a number of ways you could still be able to purchase a car.
Bad Credit Car Finance
Due to the need to sell cars and the realisation that not everyone is a high earner or has an impeccable credit score or history, smaller independent garages have taken it upon themselves to provide a solution.
This solution is essentially a form of car finance that is obtainable with less stringent credit checks made against you. Your loan agreement either sits with the garage you purchased the car from or is contracted out to a separate finance arm on their behalf.
What Can I Do to Improve My Chances of Being Accepted?
There is no guarantee that you will be able to obtain this form of finance. There are steps you can take to improve your chances of driving home in a newer car. These include:
- Making sure that you are actively repaying all debt you currently owe.
- Making sure that you aren’t ignoring any defaults on your credit file.
- Increasing your earning potential.
- Consider attaching a note to your credit file to explain to potential lenders how you came to find yourself in financial trouble.
Is Bad Credit Car Finance a Good Idea?
You will find that any subprime loan is always going to be far more expensive than a prime loan. This is because you’re considered to be a higher risk and this risk needs to be accounted for with a higher interest rate.
The interest rate available to you could be astronomical so make sure you really need that car before signing on the dotted line. Buying cars on finance is a luxury so you may be better off with a cheaper model that you can pay cash for. With no repayments required, a vehicle purchased with cash will always be available to you without the danger of repossession.
Do I Have Any Other Car Finance Options?
Your first port of call should always be your bank or a credit union. You probably won’t be entitled to the best rates and deals but they will still be cheaper than anything offered by a company dealing in bad or poor credit.
If you have a longstanding relationship with your bank, they may be receptive to lending a hand if you show you are willing to get your affairs in order.
Used Car Dealerships
If you’re sure that your car purchase can’t wait, feel free to visit one of the many showrooms in Hamilton, New Lynn or Gisborne. Most will offer vehicles on finance including for those with a poor credit history.
Do remember to read the small print and make sure that you’re capable of making all of the required repayments.