If you have a poor credit score, have an unreliable income or have been refused finance before, you might think that buying a used car on finance is out of your reach. However, we're here to show you that might not be the case! At Carbase, we offer two fantastic finance options, both of which have their benefits and may just suit your requirements.
Let's look at the various situations you may be in, and see what used car finance options could be a good fit.
Having a poor credit score can restrict you when it comes to making some financial commitments and if you need a car to get to work or carry out other daily activities, this can be a tough situation to be in. Fortunately, there's a chance that you could qualify for our HP car finance for poor credit product.
HP quite simply means you're hiring the used car you've chosen to purchase. The finance company owns the car until you've made the final payment, so the car acts as 'security' for the arrangement. If you don't keep up with your monthly payments, the finance company will simply repossess the car. While this could be seen as a disadvantage, it does allow you to take out other finance agreements.
HP is the easiest form of used car finance to get approved on, so if you know your credit score isn't great, this might be the best option for you.
First car buyer
Unless you're very lucky, you've probably got a limited budget for buying your first car. After all, those driving lessons and exams weren't cheap! HP is the most straight-forward of our finance options and is flexible, so it can be crafted to meet your specific needs.
The interest rates and monthly payments you make are fixed, meaning you know exactly how much you must pay each month. If you happen to come into some money, you can even choose to settle the agreement early with no penalty.
HP is a great option for first-time drivers who want to be able to afford a better car than they could buy with just their cash alone. This type of finance allows you to spread the cost and make car ownership affordable for almost anyone. Plus, if you're young and haven't had other forms of credit before, you're more likely to be accepted, as we've previously stated.
If you're on a tight budget or simply don't want to devote too much money to buying a new car because you have so many other important outgoings, then Personal Contract Payment (PCP) is an excellent solution. The monthly payments are reduced as a chunk of the repayment is delayed until the end of the deal. Of course, your monthly payments will depend on the deposit you put down and annual mileage.http://www.carbase.co.uk/personal-contract-payments/
The real benefit of PCP is that you have three options when the deal nears its end. You can choose to:
- Make the final payment and keep the car
- Decline the final payment and return the car
- Part exchange the car for a newer/different model
You don't need to worry about your vehicle declining in value with PCP, as you can always choose to get a new car, or give it back, at the end of your contract. This flexibility is great for families or anyone who's circumstances may change over the years. Transition from car to car has never been easier, and the equity you build up throughout the arrangement allows you to finance that next vehicle.
PCP can also be great for first car buyers, particularly those who have a small budget or want more options regarding what happens with the vehicle at the end of the deal.
Of course, there are other financial options when it comes to buying a used car, all of which we cover on our blog 'What's the best way to finance a used car?'. However, if you believe the options detailed above could be perfect for your situation, you can find out more here or by getting in touch with us. We're more than happy to answer any questions you may have, and tailor each arrangement to your individual needs.