Jan24 Archives - Page 15 of 15

Car Finance vs Personal Loan, what’s best for me?

Car dealer handing over the keys to car bought on finance

If you’re looking to buy a nearly-new or used car and considering taking out a finance agreement, you’ll probably already know that there are a few options available to you. At My Car Credit, we want to make this choice easier with our no-nonsense lowdown on car finance options. Whichever option you choose, we are here to take care of it!

Personal Loan

In short: You borrow a lump sum from the lender to buy the car, which means you own the car from the start of your contract. You then repay this money (with interest) at a set monthly rate within an agreed time limit, usually between 24 and 60 months.

Pros:

Your interest rate is fixed and lower than other options where your credit score is good
Your monthly repayments are fixed, so you can budget around them
You own the car from the start of the contract
You can choose the time limit of the loan

Cons:

Your interest rates can be higher if you have a poor credit score
You are entirely responsible for the car and all repairs
You have to borrow over £1,000

Ideal for people:

Who want to own the car from the start of their contract
Who want flexibility with their repayment structure
Who are looking for lower interest rates

Eligibility

Most people will be eligible to take out a Personal Loan. However, those with a bad credit score or those with a bad credit history (especially those that have CCJ court orders against them) may be declined.

At My Car Credit, we work closely with a number of trusted Personal Loan funders. You can make an application on our website to determine your chances of being accepted and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

Hire Purchase

You put down a deposit on a car and the lender pays for the rest. You then ‘hire’ the car from the lender until you have paid off your monthly repayments, at which point the car becomes yours. Your monthly repayments are paid within an agreed time frame, usually between 12 and 60 months, and will differ dependent on how much deposit you put in.

Pros:

The repayment time limit is more flexible
Your interest rate is fixed, and will be lower depending on your deposit amount
You are more likely to be accepted if your credit score isn’t the best

Cons:

You don’t own the car
You have to pay a deposit
There can be additional fees (such as a transfer of ownership fee at the end of the contract)

Ideal for people:

Whose finances and circumstances are suited to fixed monthly repayments
Who don’t have the best credit rating
Who want to own the car at the end of their loan
Whose disposable income could change (e.g. starting a family, changing jobs)

Eligibility

Hire Purchase agreements are one of the more accessible car finance options. Although not everyone is accepted, there is normally a broader spectrum that this option will cater for, i.e. credit profiles that range from excellent to poor, and several employment statuses, including retired, young professional and self-employed.

At My Car Credit, we have access to a large panel of lenders that offer excellent Hire Purchase agreements. You can make an application on our website to determine your chances of being accepted and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

Personal Contract Purchase (PCP)

You borrow the difference between what the car costs when you take out the loan and what it will cost at the end of the loan. This is called a Guaranteed Future Value (GFV). In other words, if the car costs £3,500 at the start of your loan and will cost £1,500 at the end of your loan, you need to borrow £2,000. The GFV also includes your estimated mileage as a factor. Normally this kind of loan will last between 18 and 48 months. At the end of your loan, you have three options: buy the car by paying what it costs at the end of your loan, give the car back and settle the loan, or part exchange for a new car.

Pros:

Your options are more flexible at the end of your loan
Service and maintenance packages, as well as warranties and insurance, are normally included
You could drive a new car that you couldn’t afford with a cash payment

Cons:

It’s more expensive than other finance options to buy the car outright
Additional charges are made if the mileage agreement is exceeded
You don’t own the car during the loan

Ideal for people:

Who want to drive a new model
Who frequently want to change the car they drive
Who don’t want the responsibility of owning a car outright

Eligibility

PCP is slightly stricter in terms of its acceptance rate. Normally, a fair credit score is required.

At My Car Credit, you can make an application on our website to determine your chances of being accepted for a Personal Contract Purchase and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

If you need any help or advice about which finance option is best for you, whether it’s a Hire Purchase agreement, Personal Contract Purchase agreement or a Personal Loan, our team of Car Credit Specialists can advise you. Just give us a call!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

I want to buy a car on finance, how much can I borrow?

Couple calculating if they can buy a car on finance

After a house, buying a car is one of the biggest purchases you’ll ever make. When you come to apply for car finance, one of the first questions you’ll be asked is how much you are looking to borrow. Whilst this might seem like a simple question, there are actually many things that influence the total amount available to you.

Financial factors

Finance lenders will look at your application and consider various financial factors to determine how much they are willing to lend you. Things such as your credit profile – including your credit score and financial history (i.e. how you have dealt with previous loans and funds) – will all come into play. They will also consider your income, as well as the deposit you have available at the start of the process (although a deposit is not mandatory) to assess whether you can afford the repayments. Essentially, lenders are looking for reassurance from your information that you will be able to afford the finance you are applying for.

If you are sure that all these factors are in order, you are ready to begin your application. One of the best ways to start this process is to figure out your budget.

Budgeting

When working out how much you can afford to spend on your monthly car loan payments, you will need to be realistic. Ensuring that the payments will not overstretch you is vital to your future financial security. You’ll need to bear in mind the running costs of the car, including the rate of miles to the gallon (MPG), insurance rates, and general upkeeping, such as MOT and service costs. The Money Advice Service provides a useful budget planner on their website, which will help you to understand these incomings and outgoings.

When applying for car finance it is crucial that you can meet the monthly repayments comfortably and on time. Depending on your credit history, you may have to prove that you can do this. This can be done by showing three to six months’ worth of bank statements and/or payslips.

One way to make payments more affordable is to opt for a longer payment term. This does mean that you will pay more interest on the overall amount, but it will make the loan more manageable on a month-to-month basis. Bear in mind that the payment term can be affected by your credit profile, and will also be subject to the lender’s criteria.

Know what car you want

It’s important that you are realistic with the car you are looking to finance. You may have a dream car in mind but the finance cost – including running costs – may not be feasible on your budget. You must avoid committing to more than you can afford – missing payments can cause problems in the future, such as your ability to obtain finance of any sort moving forward. This is especially true if you do not have savings or your income reduces.

Also, if you try to apply for finance on a car that is outside of your budget, you are more likely to be turned down for car finance, which can impact your credit profile.

To help you in this area, Money Advice Service has a Car Costs Calculator, driven by CAP data, that will help you work out the yearly running costs on the car you have in mind.

Once you’ve found the car you want, the amount you can borrow will be determined by the value of the car. Some lenders will finance 100% of the value whereas other will lend for more than the value of the car, allowing you to purchase things like insurance, extras, and add-ons.

At My Car Credit, we’re lucky to have an extensive and diverse panel of lenders who offer a variety of finance options, including loaning up to 120% and catering for credit profiles that range from excellent to poor. We are also committed to helping people across a variety of situations, including retired people, young people, self-employed people, and so on.

Do the calculations

If you think you’re ready to begin the initial stages of your car finance application, our Car Finance Calculator will provide a monthly repayment figure, an APR, total cost of credit and total amount payable. Whilst your Car Credit Specialist will tailor a car loan deal for your circumstances, the Car Finance Calculator is great for getting a good indication of what you will be able to borrow.

Ready for the first stage of your car finance journey? Access our online Car Finance Calculator here.

My Car Credit will look at your personal circumstances and make sure that the finance agreement offered to you is one that you can afford. Your interests are always at the heart of what we do. If you need any more help or advice about how much you can borrow, our Car Credit Specialists can advise you. Just get in touch or visit our Help and Advice pages

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Does Auto Finance Work?

Is It Smart to Finance a Used Car?

Can I Get a Car Loan Instantly Online?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance calculator car finance eligibility car finance options Jan24

HP, Conditional, PCP: The Lowdown on Car Finance Options

Customer calculates car finance monthly payments

With so many car finance options, choosing the best one can seem both daunting and overwhelming. My Car Credit takes the mystery out of it all by helping you understand how each car finance option works, how much it will really cost you and which option best suits your finances.

Car Finance in a Nutshell

Car finance allows you to become the owner of a car where you are unable to pay for your car upfront.
You make affordable monthly payments directly to the agreed lender of your car finance.
You will become the owner of the vehicle once you have paid the agreed amount in full.

Hire Purchase (HP)

Hire Purchase is the most common type of car finance and very simply means that you make monthly repayments and usually a small admin or purchase fee at the end.

Your car loan is secured against the car, which is owned by the lender. Whilst you are paying, you effectively hire the car from the lender and once all payments have been made the vehicle becomes yours.

Great for those people:

Who don’t want to or can’t pay cash
Who’s budget and circumstances suit fixed monthly repayments
Who have had problems getting credit
Who want to own the car at the end
Who’s disposable income might change (e.g. starting a family)

Personal Contract Purchase (PCP)

Personal Contract Purchase is similar to Hire Purchase except that you have the option to buy the vehicle at the end of the loan or hand it back.

If you decide to buy, you pay a balloon payment for the balance on the value of the vehicle. The value is fixed at the start of the agreement – the Guaranteed Future Value – so that you know and can budget for the balloon payment before you commit.

Great for those people:

Who want lower monthly repayments
Who want flexibility and options at the end of the agreement
Who like to change their car regularly
Who are confident that they can predict their mileage

Conditional Sale

Conditional sale is similar to Hire Purchase except that you don’t have to pay a fee at the end of the agreement, just monthly repayments.

Whilst you’re repaying the agreed amount of the car loan, you have possession and use of the vehicle but it continues to belong to the lender until you have made the final repayment, when the vehicle becomes yours.

Great for those people:

Who would rather pay a bit more, spread the fixed repayments and avoid a large payment at the end
Who want a choice of length of payment terms

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Does Auto Finance Work?

Is It Smart to Finance a Used Car?

Can I Get a Car Loan Instantly Online?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options conditional sale hp Jan24 PCP

Car Finance: A Complete Guide

Man drives car that he purchased using car finance

Buying a car is one of the biggest purchases you’re ever likely to make. Buying a car on finance (or credit) is a great option for those looking to spread the cost out over a period of months and/or years. Terms like personal contract purchase and balloon payment can make car finance seem confusing. My Car Credit is here to break it down for you so you can get the car you want, on a car finance agreement that works for you.

What is car finance?

Car finance is an agreement which allows you to pay for your car in affordable set amounts – rather than paying for the car in one go.

A finance lender pays for the car you want, and you pay them back in monthly instalments. The monthly instalments that you make will depend on how much you want to borrow, the length of the agreement, whether you put down a deposit, your credit score and the type of the agreement.

There are many different types of car finance agreement available, so it’s important to know which one will suit you and your circumstances.

What is Hire Purchase (HP)?

Hire Purchase is one of the most common types of car finance because it is nice and simple – you make monthly repayments to the lender over a set period of time and at the end, you own the car.

Here’s a step-by-step guide:

Whilst not obligatory, you have the option of putting down a deposit of around 5 – 10% of the car’s price.
The agreement lasts between 24 and 60 months.
During this time, you make monthly repayments to the lender and are effectively hiring the car from them.
At the end of the agreement, you own the car.

Pros:

Good for people who want to buy a car but have flexible disposable income and less than perfect credit score.
The repayments are regular and fixed which means you can budget accurately.

Cons:

The monthly repayments are normally higher with an HP agreement when compared to other options.
The finance lender owns the car until you make your last payment, so you cannot change the car to your own preferences.

What is Personal Contract Purchase (PCP)?

Personal Contract Purchase is a little bit more complicated than other options. You make monthly repayments based on the Guaranteed Future Value (GFV) of the car, which is the amount that the car is estimated to be worth by the end of the agreement. At the end of your agreement, you must pay a final sum (known as a balloon payment) to settle it.

Here’s a step-by-step guide:

The car you want is worth £9,000 at the start of your agreement but it will be worth £5,000 at the end of it – this is the Guaranteed Future Value.
You make repayments based on the difference between the larger and smaller car values (in this case £4,000) and a mileage limit that you agree with your finance lender.
At the end of your agreement (which usually lasts from 2 to 4 years) you pay a balloon payment – the end value of the car (i.e. £5,000).
You can settle your balloon payment by giving the car back, putting the money towards another agreement, or paying the amount and owning the car.

Pros:

Great for those that want to regularly change the car they drive or like to drive newer models.It has lower repayment fees than other car finance options.
Flexibility of options at the end of your agreement.

Cons:

It is more expensive to buy the car at the end of your agreement.
There is the complication of the balloon payment to settle, for which you’ll need to budget.
If you go over your agreed mileage, the financial penalties can be significant.

What is a Guarantor Loan?

A Guarantor Loan is when a third party guarantees to make the repayments on a car finance deal if you are unable to do so. Whilst you have a guarantor in place, you are still expected to be financially responsible for making the agreed repayments.

Pros:

Enables those with a less than perfect credit score or those who haven’t yet had time to build a score, to get a car.
If you keep on top of your repayments, (which in theory should always be the case) you will be able to improve your credit score as you go.
Fixed monthly repayments over a fixed period allows you to budget for this kind of agreement.

Cons:

Usually a higher interest rate (APR) than other finance options.
The guarantor must fit the lender’s criteria, which normally includes them being a homeowner.
If you fail to make the repayments, your guarantor will become liable. If your guarantor fails to make the repayments, you could both be issued with a County Court Judgement (CCJ), which would damage both your credit profiles – affecting both your abilities to obtain credit in the future.

Car Finance with My Car Credit

Buying your own car is one of the biggest (and most exciting) purchases you’ll ever make. If you think you’re ready to start the application process, we’ll be more than happy to help.

We welcome people with credit scores of all levels to apply for finance with us. We operate a soft search policy, which means that your initial application won’t affect your credit score. This allows you to shop around for the best deal for your circumstances, without impacting your credit file.

With over 30 car finance lenders and more than 4500 tried and tested car dealers, we have one of the best networks in the UK to match you with the perfect car. Get started today with our Car Finance Calculator!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Does Auto Finance Work?

Is It Smart to Finance a Used Car?

Can I Get a Car Loan Instantly Online?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options car loan guarantor hp Jan24 PCP

Representative APR and exact APR in car finance (a quick and simple guide)

dog on bed whilst woman obtains exact apr on car finance

Shopping for a car can kick up a whole new world of car finance lingo, which can become overwhelming! Terms such as interest rates, APR, Representative APR, real rates, exact APRs can leave your head in a jumble as to what it all means. We’ve summarized below what you need to know in a quick and simple guide which should leave you seeing the wood for the trees when it comes to car finance jargon.

What is an interest rate?

An interest rate is the cost each year of borrowing an amount of money. It is expressed as a percentage of the total amount borrowed.

For example, if you borrow £1000 and you are charged a 10% interest rate, you’ll pay an additional £100 on top of the original £1000, so £1100 in total.

What is an APR?

‘APR’ stands for Annual Percentage Rate. This starts with the annual interest rate and also takes into account any additional fees, charges and final payments. The APR shows you the total cost of a finance deal – the higher the APR, the more you pay back over the life of the loan.

APRs help you compare finance products accurately on a like-for-like basis. The FCA (Financial Conduct Authority) requires all lenders and brokers (including car dealers) to state the APR of any financial deal on offer.

When shopping around, always compare one APR with another, along with the total amount you’ll pay back.

What is a representative APR?

The representative APR is often used to promote a financial offer, and is used to show the cost of credit for the majority of borrowers. It is calculated as the rate that is offered to at least 51% of customers.

The representative APR is important because it means that nearly half of customers will be given a rate more than the representative APR. This is especially true where you have poor or bad credit. However, those with an excellent or good credit rating will usually be given a better rate than the representative APR.

The important thing to remember is that not all customers are eligible for a lender’s best rate of interest, and so the representative APR is a better indication of what you could be offered if you don’t have a perfect credit file.

What is an exact APR?

An exact APR takes into consideration your personal circumstances, your credit profile and financial history, and your current financial situation. It is therefore an accurate calculation of the total amount you will pay back.

The exact APR is sometimes called a ‘personal APR’ or ‘real rate’ since it is tailored to you and your circumstances.

The lender will perform a credit check (or credit search) to calculate an exact APR. The healthier your credit score and credit history, the less risk for the lender, and the lower your exact APR.

With My Car Credit, we start every car finance application process off with a soft search, which means that no mark is left on your credit file. Wherever possible, we give you an exact APR using soft search. This means you can obtain a ‘real rate’ quote on car finance from My Car Credit without worrying about it showing up on your credit history.

How can I calculate car finance?

Even knowing what all of this car finance jargon means, it can still be very complex to calculate car finance. This is why we have a free Car Finance Calculator, which you can use to work out your typical APR (dependent on whether your credit score is excellent, good, fair, poor, or bad), your monthly repayments, your total cost of credit, and the total amount payable over the term.

Try using our Car Finance Calculator. Alternatively, you can search for a quality used car from our approved dealers, and calculate finance on a specific vehicle. It’s as easy as that!

We hope this has helped you understand the world of car finance a little bit better, and if you need any help or advice, our Car Credit Specialists are here to help!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apr apr calculator exact apr Jan24 real rate representative apr

How can I improve my credit score?

The better your credit rating is, the easier your car finance journey will be – you’ll be offered lower interest rates and have cheaper repayments to make each month. So, it’s worth aiming for an improved credit rating! For those that are having difficulty getting car finance because of a poor credit score, we’ve got eleven excellent tips to help you out.

Make sure you are on the electoral roll – Lenders check this to protect themselves against fraud and to check that you are who you say you are. You can find out how to register by visiting Your Vote Matters.
Cancel any out-of-date credit cards – Many people switch cards regularly but forget to cancel old agreements if they no longer use the card. These lines of credit will still appear on your credit file and can make lenders wary about the size of your debt – some may fear that you will ‘max out’ these cards and then struggle to make repayments.
Apply truthfully – Make sure that the information you provide on applications is accurate and truthful. Inconsistencies can have a negative effect on your credit score and could be considered fraudulent.
Don’t over-apply! – Too many applications, especially in a short space of time, can have a negative effect on your future score. This is a bit of a ‘catch–22’ as if you get rejected, or the rate you are offered is poor, you’ll want to keep applying to see if you can get a better deal, but at the same time your chances of being accepted will start reducing. For initial research, we offer a soft search application that doesn’t appear on your credit file.
Use a credit card to (re)build a history – Lenders want to see that you have a reputation of managing credit sensibly. Those with little credit history, even if none of it is bad, are often rejected because they’re difficult to predict. If you don’t have a (good) credit history, build one. The easy way is with any credit card – just spend a small amount each month on it (e.g. £60), and make sure you repay in full each month (preferably by Direct Debit).
Top up your credit card – As well as making sure that all your repayments are made on time by Direct Debit, pay manually on top of this each month. That way you guarantee that you’ll never be late with basic payments, and you’ll also have the flexibility to pay for any further financial responsibilities.
Update your credit report – If you have defaulted on credit or had a County Court Judgement (CCJ) against you, it will be recorded on your credit file. Even once debts are settled, some lenders may restrict who they lend to, especially if the CCJ has been given within the last 12 months. Therefore, it is important that as soon as your debts are settled, you make sure that your lenders inform the credit reference agencies and that your credit report is updated accordingly.
Apply for a guarantor loan – If you’re getting rejected for a car finance loan based on your individual credit score, see if you can be accepted for a guarantor loan. This kind of finance option allows you to improve your credit score as you go along, as (in theory) you should never miss repayments. You’ll need to have a close friend or family member with a good credit score that trusts you to make repayments but will financially support you where necessary.
Look carefully at the small print – Make sure that you look at all the information on your credit file to ensure it accurately reflects your current circumstances. Keep a watchful eye for any errors or evidence of charges caused by identity theft or fraud.
Check if you are linked to another person – Having a spouse, friend or family member’s credit rating linked to yours through a joint account could affect your personal rating if they have a poor score.
Include additional information – Where necessary, provide further information regarding any previous credit problems. If such problems occurred following identity fraud, redundancy or divorce, and your financial situation has improved since, you can add a note explaining this.

We hope this has given you a good insight into how to improve your credit score, but if you want any other information, you might be interested in visiting our related article:

How to check if you can get finance for a car without affecting your credit score

At My Car Credit, we are open to accepting applications from people with less than perfect credit scores. So, if you require further advice, please do not hesitate to contact one of our friendly My Car Credit Specialists – they will be more than happy to help and guide you the whole way through your car-buying journey!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What Are the Different Credit Score Ranges?

How to Boost Your Credit Score in Your Late-Twenties

How to Boost Your Credit Score in Your Mid-Twenties

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

credit profile credit rating credit score improve credit score Jan24

Smart Tips for Financing Your Next Car

Woman wearing sunglasses thinking about financing next car

The world of car finance can be confusing. This often leads people to make simple mistakes which can cost them lots of money. Don't worry – we're here to give you a few smart tips to making financing your next car a doddle.

Understand your credit score

This is the first thing you need to do before you get car finance. Unlike other loan deals (e.g. mortgages, credit cards) you’re more likely (but not guaranteed!) to get a car loan regardless of your credit score. This is because the lender knows they can always redeem their investment by taking the car. However, this means that you may be willing to accept the first offer a car lender gives you. Normally, car finance will advertise their best interest rate but when you read the finer details, this only applies to customers with good credit scores.

A better indication of interest rate is the representative APR. This is the rate that the majority of borrowers will get (at least 51% of customers).

Conducting a credit score check can give you a better idea of what rate to expect. Many car finance websites have free calculators. These allow you to work out your expected interest rate using your credit score.

Keep the term as short as you can afford

Put simply: the shorter, the better. When you look into finance options you may be tempted to take a long-term contract with fantastically small monthly repayments. However, in almost all cases this isn’t a good option. Essentially, the longer the term is on your contract, the more interest you’ll pay overall. So, whilst it might be cheaper in an immediate sense, you’ll end up paying more. We recommend keeping the term as short as you can afford, but without impacting on your quality of life.

Pay for extras upfront

Most car finance deals come with additional costs. These can include registration fees, documentation fees, as well as any other additional extras you want like extended warranties. These are all normal parts of a loan agreement and are nothing to worry about. However, try to pay them in cash. Adding extras onto your loan increases your monthly repayments and you’ll likely have to pay interest on it.

If you’re looking to finance your car the right way, you should start by conducting a soft search with My Car Credit. Our approach is a great way of finding out about your credit score and the car finance options available to you without affecting your credit profile. We’re ready to help you on your journey to a great car with a great finance plan.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Our Guide to Selecting a New Car

Alloy wheel Subaru car for sale in used car dealership

Your car is something you’ll come to rely upon near-enough every day for several years, so buying a new model is a big commitment. There is a vast range of options available on the market today and, as long as you know what you’re looking for, it should be a fun and exciting experience. We’ve designed this guide with all the information you’ll need to put you in the (right) driving seat!

Do I need a new car?

This is the first thing you should ask yourself. Put simply, new cars are expensive and you need to be sure that you’re buying it for a reason. Buying a new model is an investment, so you need to make sure that you’re prepared to have the car for some years to validate your purchase. This is mainly since the car depreciates in value considerably within its first few years. However, the warranties and surety of quality that you get with a new car are often seen as good reasons for purchasing.

What car should I buy?

Ultimately your car should be suited to your circumstances. Here are some crucial factors to consider:

Usage: Your mileage is the most important thing to consider when you buy a new car. If you know your mileage is going to be high, a fuel-efficient model is the priority. You may also want to consider a slightly larger engine. On the other hand, if your mileage is lower (e.g. for driving around town) then a smaller model will be cheaper and more appropriate to your needs.

Number of seats: If you have four regular passengers in the car, a two-seater is immediately ruled out. On the other hand, a seven-seater would be excessive. You ultimately need to consider the comfort of your passengers as well yourself.

Boot space: Many people see a larger boot as being a priority exclusively to families. However, this is not true. It’s important to consider how much you travel and hobbies that require equipment too.

What other factors are there?

There are various immediate practicalities when you buy a new car (i.e. number of seats, car type) but there are also some long-lasting factors you should consider:

Fuel: You may love all the specifications of a car and then find out it’s far too expensive to run. Make sure you check the rough costs of running the car you want via a fuel consumption tool.

Tax: Every car has to pay a road tax but depending on the CO2 emissions this can vary from model to model. It’s important to know what band your car sits in using the GOV website before purchase.

Insurance: This is probably the most important factor that can easily get forgotten when you’re buying a new car. Insurance is determined by many factors such as the car’s 0-60mph, horsepower, model type (e.g. sport versus people mover); insurance can often be one of the most expensive mistakes to not look into.

Haggle, always

Last, and by no means least, you should always haggle when it comes to buying a new car. The most important part of this is doing your research. Here are some things you should know before you step into the dealership:

Have a good understanding of the model, engine and specifications you want and what you should be paying.
The price on the window screen is always a starting point.
Always be prepared to walk away. It puts you in a stronger position and you don’t lose anything.

Also, remember: When you’re haggling you have to be reasonable. If you present a ludicrous offer to the dealership on your perfect car, you’re hindering your chances of securing a purchase.

Ready to buy a new car?

If you’ve considered all of the factors concerning your new car and you feel ready to make a purchase, the last thing to consider is your car finance. My Car Credit have a panel of trustworthy lenders that will be happy to discuss your purchase. Start your journey with an application with us today!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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With so many car finance options, choosing the best one can seem both daunting and overwhelming. My Car Credit takes the mystery out of it all by helping you understand how each car finance option works, how much it will really cost you and which option best suits your finances.

Car Finance in a Nutshell

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