The 10 most frequently asked questions in car finance
Whether or not you have obtained car finance before, there are various questions you may ask about it. So here at Car Finance Genie, we thought we’d compile some of the most frequently asked questions about car finance, and the associated answers.
What is car finance?
Car finance is a way of paying for a vehicle that involves making a series of fixed, manageable monthly repayments. It is a credit agreement between the borrower and the lender that allows the borrower to spread the cost of a car over a loan term, instead of paying the entire sum upfront.
What types of car finance are available?
While various types of car finance exist – including personal loans and leasing – two especially common types are hire purchase (HP) and personal contract purchase (PCP).
Both of these forms of car finance involve fixed monthly payments and the opportunity to pay an initial deposit upfront. However, a PCP deal gives the borrower the option to return or exchange the vehicle at the end of the finance term, or instead paying a final ‘balloon’ payment to own it.
Who can obtain car finance?
Not everyone can necessarily obtain car finance – this will depend on such factors as the applicant’s age, personal and financial circumstances, employment status and credit rating.
Nonetheless, at Car Finance Genie, we have a strong track record of helping customers to gain approval for car finance even if other lenders have turned them down.
How do I apply for car finance?
The process of applying for car finance through Car Finance Genie is extremely straightforward. It’ll take you just two minutes to complete our application form, and we will make a decision on the same day.
We will compare options across our panel of lenders, which will help us to present you with the most competitive possible no-obligation quote. Once you have been approved for car finance, you can then choose a car from the hundreds available across our carefully selected dealers.
Can I get car finance even if I have bad credit?
While we cannot guarantee that any given applicant will be accepted for car finance through us, many of the lenders we represent specialise in offering car finance deals to applicants with poor credit.
Do I need to pay a deposit to get car finance?
You may prefer to put down a deposit for car finance, as this will reduce your subsequent monthly repayments. However, if you would rather not pay a deposit, you can specify this when you apply.
What vehicles can I buy with car finance?
We enjoy partnerships with various carefully selected dealers. This gives you a broad choice of literally hundreds of quality used cars to browse in our stock at any one time – including BMWs, Mercedes-Benzes, Audis, Fords, Nissans, and more.
Even if the car you would like to buy is not included in our current stock, our vehicle sourcing experts can help to find the perfect car for you.
What is APR?
APR stands for annual percentage rate, which is the interest rate applied to a loan. It is essentially the yearly cost of borrowing, paid on top of the sum applied for.
The longer you take out car finance, the greater the total amount of interest you can expect to pay, as you will be paying interest for a longer period of time.
How long can I take out car finance for?
Our car finance calculator enables you to choose between various repayment terms, ranging from one year to seven years.
What is the difference between a soft credit search and a hard credit search?
It’s typical for a company to carry out a credit search – also known as a credit check – when you apply for credit, such as a loan or car finance, with them.
A credit search involves a company looking at information from your credit report to assess your financial behaviour – including whether you have a track record of repaying credit on time, the amount of credit you presently have, and how you’re managing it.
A soft credit search differs from a hard credit search in that it is simply an initial look at certain details on your credit report. It isn’t visible to any other companies, so it doesn’t impact your credit score.
By contrast, a hard credit search is a complete check of your credit report and is recorded on your report. This means other companies searching your credit report will be able to see your past credit applications. Too many hard credit searches in a short time period can adversely affect your credit score, potentially making it harder for you to be approved for credit in the future.
When you apply for finance through Car Finance Genie, we will only perform a soft search. We will never undertake a hard search of your credit report without your permission.
To take advantage of our hassle-free service, simply apply through our website today. We make it easy for you to #WishUponACar – whatever your circumstances and needs.