Many of us in the UK consider getting a car loan before buying a car. However, car financing can be much more expensive when purchasing an old car. While you will save thousands by buying a used car, you’ll also have to pay thousands to cover the interest
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So, it is always good to take some steps to ensure that you are getting the best rates. Some of the things you can do to get cheap second-hand car financing are:

1. Improve your credit score

When you are planning to finance a used car, it is extremely important to have good credit scores. Your credit score will affect the car loan interest rate you are offered. Unless your credit score is over 700, you will likely not get a good rate. So, increase your credit rating before applying for used car financing.

2. Keep the length of the loan short

It may be tempting to pay off your car loan in smaller amounts over a longer period. However, the longer the loan term is, the more interest you will pay. So, keep the loan term short, ideally within 1 or 2 years. You will end up saving a lot more money in the long term by doing so.

3. Pay a down payment

The more money you can pay upfront, the less money you have to pay interest on. If you can put around 20% of the car’s price as a down payment, it can significantly decrease your used car loan interest. In fact, it may decrease your used car finance rate as well, making it way more affordable for you in the long run.

4. Pay any fees in cash

Fees such as sales tax, dealership fees, documentation fees etc., may be included in your car loan amount. But it is best to pay for these fees upfront. Otherwise, you will have to pay interest on such fees with each instalment, thus increasing your interest amount.

5. Make your payments on time

When you start paying monthly instalments to pay off the second-hand car finance, you must be diligent in making the payments on time. If you make late payments regularly, you may have to pay additional fines and penalties. So, it is best to set aside the re-payment amount each month to ensure that you are never late on a payment.

In conclusion

If you are planning to finance a used car, you must be very careful and consider these factors. Otherwise, you may have to pay a higher price than the car is worth. Moreover, spending too much money on a car that will eventually depreciate in value is not a good idea.

If you are looking for affordable used car finance options, visit Wheelie Good Finance today to get started.

Adam Barton is the author of this article. To know more about Second Hand Car Finance. Please visit our website: wheeliegoodfinance.co.uk