Short answer: yes! Being out of work is not the barrier you may think it is to buying a car. A little bit of planning and research go a long way. Read on to see what you can do to get car finance – you could be driving away in a new car sooner than you think.
Check your standing and budget
Before you start to think about lenders, the first thing to do is check your credit report. Do this in good time, say at least three months before you plan to buy, to give yourself time to fix any surprises there.
You can get your credit report for free. And with free 30-day trials with Experian and Equifax, the biggest credit reporting companies, that extends to your credit score too. Just remember to cancel the monthly payments after the trial period if you don’t want to continue the service.
Consider how anything in your credit report might look to a potential lender and rectify any negative points you can before you rock up to discuss a deal.
Next, check out your credit score. If it’s 560 or below, out of a possible 999, your risk is considered very poor. But don’t panic! The fact is, people can and do buy new cars with no job and/or bad credit. You just have to pay a little more to cover the risk.
Finally work out your monthly budget. What can you afford? What’s the best car can you get for less – for example, what car deals are available? Borrowing a little less than the maximum you can stretch to is always the best option – making sure you can pay it back without stress.
Find the deals
So you’re ready and armed. And now the fun begins. You can check out lenders online, but perhaps start for a first comparison with your bank or insurance company. If you’ve been with them a while they’ll be able to see your financial history, and your relationship with them may benefit you.
You should avoid lenders who specialise in marketing to people with low credit. Why? Well, the chances are, they’ll charge much higher interest rates. The best deal will be the one with the lowest annual percentage rate (APR) over the shortest number of payments. Ignore the lure of lower monthly payments. These will be made over a longer period of time, increasing the total amount you will have paid on the loan.
Instead, look for professional car dealerships, such as Perrys, who approve 9 in 10 finance applications and will help arrange the best finance scheme to suit your circumstances. And you’ll find you’re in good company, too – because it’s so easy, flexible and well regulated, more than half of all buyers choose dealer finance to buy their car. Why? Well, our experience for one – having helped people for generations – and also because it gives us a chance to develop the longer term relationship with our buyers that we’re really passionate about. We can help you with not just this car’s purchase but its servicing and maintenance, and after that, trading your car in and choosing other, future cars – and you can relax knowing your motoring is in good hands.
Double checks and chocks away
So you’ve got your credit score, repaired your credit history, calculated your monthly maximum payment and identified a couple of great deals for car finance. What next?
Take your driving licence and a recent utility bill with you, so you’ve got the proof of ID you need and can sign the finance deal there and then if it’s what you want. If you can take a couple of personal references too, they could help.
Make sure you’re crystal clear what you’re signing up to before you sign. Read the small print and consider other helpful options you could benefit from, such as an extended warranty or insurance – discuss such points with your dealership, they can help advise you. And if you take a loan from a bank, make sure the terms of the loan are final. Sometimes people have had their monthly payments increased, or have been told after the purchase that the interest rate is now higher. Check out our reliable deals – and happy hunting!