Applying For Finance With Bad Credit

Temptation.

It itches at you: it whispers promises. But most of the time you’d be wise not to give into it.

Take car finance, for example. You’re looking at a brand new car. You really want it but your credit score is so low that taking out bad credit car finance may be your only option. However, your partner or your dad suggests that they take out the car finance in their name, they pay the bills and you pay them back.

Sounds so,… tempting.

What could go wrong? What indeed.

Having someone else take out finance for a vehicle on your behalf but in their name is called an Accommodation Deal and it’s not actually illegal in itself. Legal and sensible are not the same thing, however.

Firstly, Car Finance companies are practically allergic to such an arrangement and you’d be very hard pushed to find a company who’d agree to it. To them, the risk of defaulting on the finance still, essentially, lies with you: you are the one who should be paying back whomever is paying the installments.

If you can’t pay them back then they may not have the funds to continue paying the finance company or dealership. There would be nothing in the paperwork to protect the finance company from the messy business of chasing that debt and losing money at your expense.

Car Finance companies and Dealerships are wise to this and they almost exclusively add in small print into the contract that states clearly that the person paying for the car must be the primary user of the vehicle.

Now, an Accommodation Deal is not illegal but lying on a contract is. If that car ends up in your hands but the contract is not in your name, the person signing the contract could land in very hot water indeed, especially if you default on the finance deal.

If someone offers to sign a finance deal on your behalf because your Credit Score isn’t up to snuff, don’t be tempted.

There are other ways around it, however. Ways that are both legal and can allow someone else to help you out if you’ve got a poor credit score.

A Guarantor Loan will allow a friend or family member over the age of 21, with a good credit score, to volunteer to guarantee your repayments. This means that if you don’t keep up repayments, they become obligated to pay them for you. The contract is in your name, the car is in your name, the repayments are in your name.

The upside of this is that Car Finance companies, Lenders and Dealerships are happier to lend to you and care less about your low credit score. You could get the car you want.

You need to bear in mind that the person who guarantees your payments needs to understand and accept that they have to pay if you can’t. You have to trust them and they have to trust you.

A Joint Purchase agreement is also an option. It’s a bit like a Guarantor Loan crossed with an Accommodation Deal. Ish.

The difference here is that you and another person both sign on to be owners of the car, with equal responsibility for the finance. But if the second person has a better Credit Score than you, you’ll be in a better position to have that shared car on your driveway.

Signing that contract makes the car legally both of yours. You can’t just treat it as yours by law and you cannot sell it on, modify it or otherwise tinker with it without that other person’s express permission. You must also both understand that if you can’t pay the finance, they have to and vice versa.

A poor Credit Score shouldn’t tempt you into a dodgy deal – there are options available. If you’d like to discuss them further, visit ChooseMyCar now and have a chat with one of our experts.

Don’t give into temptation.

Unless it’s a donut. Always eat a donut.

Why PCP May Be a Good Option For You

There, we said it. And it’s true.

Even accounting for the obvious difference of inflation, new cars are simply more expensive than they used to be. They have more technology, more safety and more features than they used to, and that’s what buyers want.

Go back Fifteen years and a car with a Bluetooth connection for streaming music was a luxury item – now it’s the very least you should expect in your in-car entertainment. Now buyers expect Android Auto and Apple Car Play on tap, meaning that new cars need bright, sharp touch-screen displays. Then comes the need for manufacturers to build their own software to make the best use of these screens and offer more functionality.

You can see how it all adds up.

But why shouldn’t you have the latest technology in your car? The Cost?

Ah, that’s where a PCP deal has you covered.

Are Car Finance Rates Predicted to Drop?

Predicting the future is a tricky business. Just ask Marty McFly,… and he had an actual time machine.

Nobody is going to tell you next week’s Lotto numbers or the winner of the Derby but there are some things you can take a good guess at. One of those things is Car Finance.

Don’t believe us? Come close and gaze into our crystal ball,…

Now, there’s a lot about car finance that is under your direct control. You control how much of a deposit you place down. You control how many payments you want to make and over how long you make them. Both of these have a direct impact on the amount of money your car loan or lease is going to cost you by the end of your contract.

But the Interest that is placed on your loan is a little less predictable, though you do have some control.

In this article we’re going to be discussing the parts that are out of your control but let’s start out with a lesser-known secret of car finance:

Just as you can negotiate the terms of your lease or loan, you can also negotiate the APR (the interest and other charges) that your lender or dealer adds to it.

That’s right: you can haggle your APR.

Keep that in mind as we look into the future of Car Finance.