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Getting your next car can be a stressful time. If you’re looking for your dream car with the perfect price tag, it can take a little longer to find one for you. However, there are a few easy ways in which you can make the process a little bit easier.
Work out a budget
No matter how you choose to find your car, you should always have a budget in mind. If you’re getting a car on finance, you should work out a monthly budget for finance.
You should never borrow more than you can afford to pay back as it can result in financial difficulty. Buying and owning a car can be expensive. Within your financial budget, you should take into account your car insurance, road tax, fuel costs, MOT and servicing costs too. You can often find cheap car insurance by comparing quotes online.
Increase your credit score
Having a better credit score can influence many parts of your financial life including car finance rates and sometimes insurance prices too. Potential finance lenders usually take a look at your credit file before approving you for finance as they want to know whether you will be trusted to pay back your loan.
There are a few ways in which you could help to increase your credit score.
- Pay your bills on time and in full
- Clear any existing debt before taking on more credit
- Register on the UK electoral roll
- Don’t max out credit cards or store cards and try to use under 50% of your credit limit
- Disassociate yourself from any financial links who have bad credit as it can affect your credit score negatively
- Limit the number of credit applications you make in a short space of time
Save up for a deposit
Having a deposit for your dream car can be really beneficial, especially if you are taking out car finance. Putting more money down for a deposit, can reduce your monthly payments and help to lower your interest rate offered. This is because you don’t have to borrow as much from the lender.
However, if you need to get it in a hurry and don’t have a deposit, there are many no deposit car finance deals available with affordable monthly payments.
If you know what type of car you already want but just need to find it, you may want to shop around first. If you are looking for finance, you could consider getting pre-approved first, instead of at a dealership.
This way you make sure you get the best deal possible for you and also know the budget you have for finance. Be sure to go when it is nice weather if possible as extreme weather tends to make you rush!
Consider both new and used
Buying a used car is usually the best way to get a good deal and a cheap one. However, there are many good deals on new cars which could save money.
Many people worry about the car depreciation rate of different cars and some new cars can lose 50% of their value in the first year. However, used cars tend to be older and may have more faults.
When shopping around you should consider both new and used cars to see where you can get the best deal. You can also get a cheaper deal depending on the time of the year.
New car registrations come out in both March and September every year. You could get a good deal the month before the new plate as many dealerships want to hit their targets which can mean reducing the price of used cars.