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Seven Common Car Finance Myths and Untruths

UK Car Finance
24, Jul 2020

Anyone considering car finance for the first time should make sure to do plenty of research in advance.

Each of the following myths has the potential to be dangerously misleading:

1. You Can’t Pay Off Car Finance Earlier Than Agreed 

You can always pay off car finance earlier than agreed, though some lenders will charge you a set fee for doing so. This is why it is important to check the terms and conditions ahead of time, ideally under the advice of an independent broker.

2.  Car Finance Deals Direct from Car Dealerships Are Better

You will usually find that the best deals come from independent lenders, with no specific ties to any dealerships. Comparing the market with the help of a broker always paves the way for the best possible deals and discounts.

3.  Comparing the Market Can Harm Your Credit Score

Every direct car finance application and subsequent rejection could harm your credit score. Comparing the market with the support of a broker will have no impact on your credit score. 

4.  You Can Only Get Car Finance for Brand New Cars

Car finance was once available near exclusively for new vehicles, but this is no longer the case. These days most decent car finance specialists are willing to finance the purchase of used cars at affordable prices. Not to mention, motorcycles, vans, motorhomes, caravans, commercial vehicles etc.

5.  It Takes Forever to Set Up a Car Finance Deal

Filling out the necessary forms and submitting the accompanying documentation will take you no more than around 10 minutes. After which, you will be provided with an initial decision almost instantaneously followed by a formal offer within a matter of days.

6.  Deposit Requirements Are Always Excessive

Not only are deposit requirements far from excessive, you may not need to pay a deposit at all. Deposit requirements vary from one car finance specialist to the next – your broker will help you find the perfect lender to suit your preferences and budget.

7.  Car Finance Adversely Affects Your Credit Score

Quite the opposite. Evidence of a car credit facility that you have kept up with and managed responsibly can actually improve your credit rating. It is only when you apply for credit and subsequently fall behind on your repayments that you run the risk of credit score damage.

For more information or to discuss any aspect of car finance in more detail, contact a member of the team at UK Car Finance for an obligation-free consultation.

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