A large majority of people purchase their new vehicles on finance. However, no two finance companies offer the same deal. Different people going into a car dealership to buy the same car often end up paying different rates.

It is vital that before you opt for a car loan, you do your research on the Best Car Finance Deals in the UK.
This article explains the five factors you need to consider before finalising your car finance deal.

1 – Eligibility And Credit Record

Your credit score is the most important criteria that banks or lenders use to determine your loan eligibility. The credit record decides your repayment capability on the borrowing.

A low credit rate could mean that you end up with a lower loan amount and much higher interest rates. A poor credit score could also mean rejection of the loan application.

Before applying for a loan, one should ensure that your credit history is good and fulfils the bank’s eligibility criteria.

2 – Interest Rates

Another important thing you should do is compare the interest rates of different banks and finance companies. Even a minuscule difference of a couple of points in the interest rate can affect the total amount you have to repay.

Interest rate is extra money you have to pay, over and above the actual cost of the car. So, look for the lowest interest rate among all loans offered by car finance companies in the UK.

3 – Length Of The Loan

Loan repayments happen over a period of time. It is a long-term investment, and generally, the period of payment varies from one year to seven years or more.

Lower monthly payments might seem convenient and attractive, but be mindful that it can increase the interest amount you pay. Also, low amount will mean that the loan period will stretch over a longer period.

4 - Pre-Closure Penalties

Do not forget to inquire with the bank about any pre-closure penalty charges before applying for a car loan.
A foreclosure penalty is charged on the balance amount whenever you opt to repay the loan in a lump-sum payment, much earlier than the end of the loan tenure.

5 – Insurance

You would need comprehensive car insurance when you take a secured car loan. Insurance protects you against potential damage in the case of accidents or any other mishaps.

A loan protection insurance will cover the loan amount balance if you cannot repay it for any reason.
In summary, if you do your research well and are diligent, getting the best car loan deals will be an easy task. If you are looking for the best car finance deals in the UK, click here.

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