What factors need to be considered before you finance your car?

The first thing you should consider before you finance your car is the interest rate.

Interest rates will differ from lender to lender, so it’s important you choose a great car finance team who offer generous interest rates. The rates may seem small, even if there’s a difference between them.

For example, a 10% interest rate may not seem that much bigger than a 5% interest rate, but it means you’ll pay double the interest. Not double the repayments, because you’re not borrowing double the principal amount.

Another factor is the fees and charges. These added costs could include establishment fees, discharge fees and late repayment fees. Again, this comes down to choosing a car finance team with integrity, who openly lay out all their fees and charges and don’t mess around with those cheeky hidden costs.

Before financing your car, work out how much you can afford with our monthly repayments calculator. It’ll let you choose the vehicle you have in mind, or enter the vehicle value, interest rate, loan term and deposit. This will give you an estimate on how much your monthly repayments will be.

Your credit score is another important factor to consider before getting car finance. Your lender will check your credit score before working out an appropriate car finance plan for you. High scores could get you a cheaper interest rate, whereas low scores may result in rejection.

How long do you want to take to pay off your dream ride? The longer you take, the more it will cost to pay off the car, as you’ll have extra interest to pay for.

That being said, sometimes it’s worth to go slow and steady and to be comfortable with a monthly repayment plan that suits your needs.