Buying a second hand car can save buyers lots of money when compared to buying a brand new model. There are plenty of great options to be found online on a used vehicle that will meet your budget requirements, no matter the condition or mileage you are looking for. Whilst a second hand vehicle can be a cheaper option, many people will still need to look at finance options to make their purchase a reality. However, if your credit rating has seen better days, finding a lender that can help provide affordable car finance for bad credit can seem like an impossible task. If this sounds familiar, don’t feel discouraged, as many people do still get approved despite poor credit for the car they want. To help improve your position when buying a used car with poor credit, here are some tips to keep in mind.
Show You Can Afford Repayments
A key thing to ensure if you have a history of bad credit is that you can afford to take out further borrowing. Whether you are buying a car for the first time or have purchased multiple vehicles in the past, if you cannot afford the repayments needed, your options for finance will quickly fade. A lender needs to see you can afford the car finance before agreeing to it so that they can ensure you will be able to maintain the repayments throughout the loan term. If you are unsure what you can afford to pay each month, it’s a good idea to review your finances and work this out. Compare your essential monthly outgoings, including mortgage payments or rent, existing borrowing and utility bills etc, with your monthly income. The more thorough you are, the better you will know what you can comfortably afford each month. Having copies of your recent bank statements can help show this to a lender if you have done this accurately.
Find Specialist Car Finance
You may have already experienced declined applications through high street banks or other lenders in recent months. Whilst there can be many reasons for this, having bad credit or a low credit rating will heavily influence this decision. Rather than continuing to apply at random hoping for approval, finding specialist lenders who can specifically help those with bad credit is a smarter approach. Taking the time to find this type of lender will improve your chances of getting the approval you seek for the car you want. You should still only used trusted lenders, those authorised by the Financial Conduct Authority (FCA), to ensure you are treated fairly and your application is handled securely. Bad credit lenders are more likely to review your application despite your credit history, improving your chances of getting approved if you can afford the repayments required.
Pay a Deposit Where Possible
One way to increase your chances of a successful application is to borrow a smaller amount by paying a deposit first. The more you can afford to pay upfront, the less you will need to borrow overall. This will provide the lender with part payment straight away, helping to reduce the risk of lending to you thanks to this initial commitment. Some lenders may still require a guarantor alongside a deposit before agreeing to lend the funds, but many others can help you as a sole applicant. If you can afford to pay a lump sum upfront, this will also reduce the monthly repayments required, helping make the car finance as affordable as possible to maintain.