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Blog / Finance & Part-Exchange / Buying a Car On Finance Explained

Written by : sshields

Published on:: 06/02/2017

Buying a Car On Finance Explained

If you have decided to buy a car on finance, there are a few things you need to consider before taking the plunge…

What monthly payments can I afford?

This is all down to how much disposable income you can afford to part ways with each month without over stretching yourself. Check out our blog on setting a budget for a new car.

Can I get car finance?

When you apply for finance, the finance company will check your credit score to check your eligibility for car finance. There are several factors that can affect your credit score, such as late payment of a bill or even being rejected for credit on several occasions. The best way of checking your credit score is to use Experian to get the lowdown on what might be affecting your score.

If you want to see how likely it is that you can get car finance without leaving a mark on your credit file, use our free tool to check your eligibility.

Choosing your finance options

The Car People offers two popular finance options: Hire Purchase (HP) and Personal Contract Plan. Each one has its pros and cons, and you can find out more about them by watching the video below:

More often than not, it is cheaper to get a personal loan from a bank if you are eligible for the low rates. However, you don’t get the same protection as with car finance, as the loan is not secured and you own the car outright as though you were a cash customer. Also, you can’t voluntarily terminate (VT) as with finance, so if your circumstances change, it can be more difficult to change into another car or reduce your monthly payments.

Choosing a car

Choosing which car to buy on finance at The Car People is super-easy. All of our cars show what the lowest figure you could be paying with just a £200 deposit. There are other factors to consider such as your part-exchange and any finance you may owe on it, if applicable. Our search tool allows you to narrow down your search based on your budget.

Applying for finance

Once you’ve chosen your new car, you can either pop into one of our branches or apply over the phone to save you a journey. Once approved, it’s just a case of understanding the finance agreement and signing the documents. Then you’re ready to drive away. Simple!


Author Bio

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By Steven Shields, Social Media Executive & Content Writer for The Car People.


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