FINANCING YOUR VEHICLE
You have two choices when financing your vehicle, either go for the dealership loan or the high street. Both agents will be paid a commission, with a dealership loan, the pressure will be higher. You are dealing directly with the individual that gets paid for selling you the loan. Usually between 5% and 15% of the total ticket price. That’s not a bad earner if you buy a car for £5000, the sales agent would get between £250 and £500 just for selling you finance as well. However on the flip side you can usually use this to your advantage by negotiating the sale price. If you walk away their loss will be greater putting you in a better position! The high street allows you more choice of loan but with no power of negotiation.
The APR is commonly mistaken for being an interest rate. Its not. It is a debtors rate. In other words if you make no payments to pay back your loan, this is the rate with which the bank can charge on the loan. In other words it is the interest rate you need to check, not just the APR.
All loan applications will incur a credit check and you can usually get a decision in minutes based on your credit history and the term is usually 5 years. Although it is now law that you can settle the loan amount at any time. This can usually incur a fee of one months interest plus the equivalent of one months notice. You can ask for a settlement figure from your finance company at any time.
You will need to provide proof of identity if you get your finance from a Garage, usually this can be a drivers licence, a utility bill and or a passport. Don’t forget if you write your car off you still have to pay back the loan.