Whilst most of us will happily spend hours researching the best new or used car to find the one that meets our needs, we rarely use as much diligence when it comes to arranging the finance to fund the purchase. This article looks at the top 10 reasons why it is important to shop around and find the best car loan.
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- The internet makes it easy. Probably the key reason to shop around is that it’s so easy to do so with most people having internet access nowadays. There is, therefore, no excuse for not making use of the technology at your fingertips.
- You can compare rates. There are many sites where you can compare the rates offered by different lenders. Whether it’s by using a comparison website or going to a specialist car finance company, you can quickly get a good idea of the loan products available.
- You can find the best lender for you. Shopping around will also allow you to find the right lender for you, whether you have an impeccable credit record or have made some poor financial decisions in the past.
- You can check affordability. When looking at different loan products you can also establish how much you can borrow and what the monthly repayments will be, ensuring affordability.
- You can borrow over the right term. Lenders offer a wide range of repayment periods. You may find it better to borrow more over the longer term or be able to borrow over a shorter period than you first thought.
- You will have finance in place when you find a car. If you already have finance organised when you find the car that you want to buy you will be able to avoid the expensive financing options usually associated with dealerships.
- You can narrow down your vehicle options. Knowing how much you can borrow can also help you to find the right car as you can immediately discount those that you know you can’t afford (however much you might like them).
- You will be better able to negotiate. Having finance in place could also improve your negotiating position. You will have certainty about how much you can afford to spend and having the funds in place will also make you more attractive to the dealership.
- You can minimise upfront payments. By shopping around and finding the right car loan you may be able to minimise the amount of cash that you need to pay upfront, either by increasing the level of the loan or because the dealership can see you have the funds in place.
- A loan can help your credit rating. Finally, whilst it may seem somewhat strange, by taking out a car loan you could actually improve your credit rating. If you meet all the repayments on time, you will have demonstrated that you are financially responsible and may be able to access better rates next time round.