It is common to purchase a new vehicle through car finance, but the rates you pay each month can depend on a number of factors. For example, someone with a good credit score may be offered a different price to someone who needs bad credit car finance. However, there are ways that you could save money on car finance, no matter which provider you choose.
1. Buy At The Right Time
It is no secret that car dealerships have targets to meet each quarter, and purchasing a car closer to the end of their targets is when you are likely to see a price drop. Typically, the best times to purchase in the UK are the end of March, June, September, and December. Equally, you should aim to avoid busy times of the year, such as peak summer. Instead, look at the middle of winter or quieter periods of the year to find the best deals.
2. Make A Higher Deposit If Possible
Putting down a higher deposit on your car will mean that you own more of the vehicle, and resulting in lower monthly repayments. Overall, your car finance may not be cheaper, but if you were purchasing a car with no deposit, you may be prone to paying higher monthly repayments.
3. Do A Part-Exchange
If you already have a car, you may be able to part-exchange in a dealership to reduce the price of a new vehicle. Ideally, your existing car would need to be in good condition, so it could be worth fixing any quick dents or scratches to avoid losing extra money on your vehicle. This can also reduce the stress that comes with selling your car privately, however a private sale may return more value, so it is good to assess your options.
4. Use Brokers Or Price Comparison Tools
Using a broker service can take out a lot of time and effort that comes along with searching for the best car finance deals. Many brokers may also have exclusive partnerships with providers, so they could find you the best deals. If you would like to do the comparison work yourself, there are plenty of tools available online that you can use. With many, you will be able to add your financial details and the type of car you would like to see who offers a suitable option. But remember there are many specialist finance companies out there that do not display on comparison sites, so for a full view you will need to contact some companies direct.
5. Consider Improving Your Credit Score
This can be applied for each prospective financial product application. The better your credit score, the better rates you could receive on your car finance. Some simple ways to make improvements include adding your name to the electoral roll, making sure your billing addresses are up to date, paying off existing debts, and keeping your credit utilisation below 30% on credit cards. Of course, other factors come into play, such as affordability, and you should check this before applying.
Hopefully this list has given you some ideas of how you can find the most affordable car finance deals for your next purchase. However, if in doubt, remember to shop around and be willing to negotiate to reach an agreement that suits you.