Millions of people in the United Kingdom opt to buy cars on finance; after all, who’s going to have a spare £15,000 or more to buy a brand new car?
For the most part, it is often easier to obtain car finance than an unsecured loan because the finance is secured against the car, and finance companies can repossess your car if miss your monthly instalments and make no effort to get up-to-date with your payments.
According to Thames Motor Group, lenders that offer unsecured loans are taking more of a risk lending you money, and given the economic problems associated with the last decade and beginning of this one, many lenders are wary about lending money anyway.
The problems with poor credit history
Trying to borrow money these days is harder than it used to be, and if you have got a poor credit history, the task can be seemingly impossible. The truth is, you can still borrow money, but your choice of lenders is somewhat limited, and you won’t usually be able to benefit from the best rates on the market.
Even if you are careful with your money, other factors could be influencing your poor credit history, such as not borrowing any money at all in the past, or perhaps you may have been an unwitting victim of identity fraud.
Before you consider borrowing any money to buy a car, I would strongly recommend that you get a copy of your credit file so that you can see what’s what and action any problems that might be preventing you from obtaining credit from places such as High Street banks.
Once you have had a look through your credit file, your next step is to think about how you can fund your next car. Here are some practical ways of doing so:
Save up the cash
This might sound like an alien concept to some people, but if you’ve got enough spare cash lying around each month you should consider saving up for your next car! Paying for a car in cash is the cheapest way to fund a car purchase, because you don’t have to pay any interest rates or lender’s fees for arranging your loan or finance.
Get a second job
On the other hand, if you’ve got very spare little disposable income to play with, you should instead seriously consider getting a second job. This doesn’t necessarily have to be something that you have to travel to after your day job, as it could be something that is computer-based and could be done from home.
Do some overtime at work
If you can get paid more by doing overtime at work, you might want to consider that as an option too. Doing constant overtime isn’t for everyone, though, so you should make sure that you can handle the extra work as you don’t want to burn yourself out.
Sell unwanted things around the home
Everyone has valuables lying around their homes which are just gathering dust, but could be turned into cash! Start by spending a day gathering all of your unwanted valuables together, and deciding where to sell them (i.e. at local shops, at car boot sales or online through websites such as Gumtree).
You would be surprised by the amount of money you could generate simply by selling unwanted household items!