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Top tips to ensure you are being offered a fair deal on your car and finance

In this piece, we share some top tips to ensure you don’t get caught out when looking to buy your next car.
By Editorial on Apr 17th, 2018   @freelotteriesuk

Last month we shared the results of a survey commissioned by FairSquare which found three quarters of consumers are unsure if they are being offered a fair deal on cars and finance. A huge proportion of car buyers are left feeling dissatisfied. That is why we have decided to share some top tips with you to ensure you don’t get caught out when looking to buy your next car.

Check your chances of being approved before you apply

When you apply for any form of finance you could be unnecessarily putting your credit report in danger if you’re not careful. If you apply for finance and get declined, the next finance lender that looks at your application may be put off by the previous decline on your credit file. Some lenders don’t like lots of credit applications close together, (it makes it look like you’re desperate for credit which asks the question regarding your affordability) so you want to ensure when you do apply somewhere you are likely to be approved.

You need to be able to check your chances of being approved and your expected flat rate before you even apply. That way you know you’re using a company that is more likely to approve you while also saving time and protecting your credit file. Using this car finance calculator and asking for a 'more accurate quote' you can find out exactly that. It works by working out your chances of being approved based on others with a similar credit report, they’ll also tell you the expected flat rate so you can decide whether it suits you before you even apply.

Know your credit score

Knowledge is key and with car finance that is no different. There are many factors that influence your chances of being approved for a car loan, one of which is your credit report. A credit score is used by car finance lenders to determine how risky you are. Your recent credit history is a lot more important than factors from years ago, however, certain factors such as CCJ’s can stay on your credit for a few years. You can check your credit for free by using a site like Noddle.

Consider using a broker rather than going direct to dealers or lenders

We live in a world where we can compare almost everything, from holiday prices to energy bills. Comparing the market allows you to find great deals we wouldn’t have discovered otherwise. When it comes to car finance the brokers do this for you. They tend to have a large panel of lenders and can match you up to the most suitable one depending on your criteria. If you choose to go straight through a car dealership or directly to a lender you may be missing out on a lender that would be more likely to approve you at a lower rate.

Don’t apply to numerous places

This is the same for almost all types of credit, but if you’re applying for car finance then you want to wait until you have a decision before you apply elsewhere. That is why it’s so crucial to only apply with companies that you have a good chance of being approved with. Some lenders don’t like when you have lots of applications for credit on your report within a short time frame, they see it as you are looking desperate for credit and can cause your affordability to come under questions. In short you should only apply to one company and then wait until you have a decision before applying elsewhere.

Always test drive the car

You should always test drive the car before you buy to ensure you like it and that there are no faults. Simple things such as the size, is it big enough for your family? Is the enough boot space to fit all your luggage? These things can easily be overlooked and cause you to regret the car you’ve bought. You should also assess the car as thoroughly as you can, from whether you like the way it drives to ensuring it seems mechanically sound. If you don’t test drive the car you could be stuck with something that doesn’t work for you. If you have taken out finance for that car, then this can be a nightmare. Make sure your happy with the car your buying before you drive away.

Consider putting down a deposit

There are some fantastic no deposit car finance options available but it’s not for everyone. If you want to minimalise your monthly repayments as much as possible then you can put down a deposit which will be deducted from your loan value. That way you won’t be paying any interest on the deposit value and it will make the amount you pay back less. If you aren’t able to put a deposit down, and let’s face it most of us can’t, then shop around for no deposit options with as low of an APR as you can get.

Check company reviews

Reviews can give a really good indication of how good a company really is. You wouldn’t use a company a relative or friend had an awful experience with, similarly if you know that a previous customer has a horrible experience you might think twice. That said, bad reviews aren’t always fair, always look at the negative reviews and see how the company responded to get a full understanding. It’s sometimes good to know if something was to go wrong the company will look after you fairly.

Feel like you’re being scammed?

If you have come across this article a bit late and think you may have been treated unfairly when getting your car there are a few options available. Start by contacting the party involved, so if it’s an issue with the car contact the car dealership, if it’s to do with your finance agreement contact the car finance lender directly. If you feel like you’re still not getting anywhere you should alert the Financial Conduct Authority, which is responsible for regulating the financial industry in the UK.

Well there we have it, we hope next time you come to buy a car you feel more confident that you are actually in control. Do you have your own tips? Let us know in the comments below.