Question 1

Is getting a car on finance worth it?

Accepted Answer

Getting a car on finance can be worthwhile if you're comfortable with the monthly repayments. It allows you to afford a car that might otherwise be out of reach financially. While purchasing a new car outright can be costly, car finance options make buying a car more manageable. However, keep in mind that financing a car can be more expensive overall compared to buying outright, especially when factoring in interest over the loan term. It's crucial to understand all associated costs and commit only if confident in your ability to meet the repayments. Ensure the deal aligns with your budget and financial goals before proceeding.

Question 2

Do I need a deposit?

Accepted Answer

You may not necessarily need a deposit, as it depends on the lender. Many lenders affiliated with Moneyrepublic offer options without requiring a deposit. However, if you can afford it, putting down a deposit or using part-exchange can lower your overall loan cost and reduce your monthly repayments. Consider your financial situation and preferences when deciding on a deposit.

Question 3

What is a good deposit for a car?

Accepted Answer

A good deposit for a car is typically around 10% of the loan amount. The larger the deposit you can afford, the more cost-effective your car finance will be. With a bigger deposit, you borrow less and may pay lower interest over a shorter loan term. However, the key is to choose a deposit that you can comfortably afford without leaving yourself financially stretched. Remember, aside from the deposit and monthly payments, you'll have other expenses like car insurance and road tax to consider. Aim for a deposit that balances affordability with long-term financial stability.

Question 4

Will applying for finance affect my credit score?

Accepted Answer

Applying for car finance involves a credit check by the lender, which is recorded on your credit report and may affect your credit score. Moneyrepublic conducts a soft credit check to match you with suitable lenders without impacting your credit score. However, when you submit a formal application, a hard credit check is performed, which can impact your credit score temporarily.

Question 5

Can I get car finance with bad credit?

Accepted Answer

Yes, it's possible to get car finance with bad credit, with a common representative APR of 19.9%. Moneyrepublic works with a network of lenders, including specialists in car finance for those with bad credit. Even if you've had difficulties with repayments in the past or have a limited credit history, we can help match you with a car loan that suits your needs. However, finance is subject to status, and your eligibility will depend on the lender's assessment of your individual circumstances.

Question 6

Who can get a car finance deal?

Accepted Answer

To qualify for a car finance deal, you typically need to be over 18 years old. However, specific requirements may vary among lenders. For more information, you can visit their website or contact them directly via phone, email, or post. It's essential to check with the lender to understand their specific eligibility criteria.

Question 7

Can I repay my car finance deal early?

Accepted Answer

Absolutely, you have the option to repay your car finance deal early. To do this, you'll need to pay what's known as the settlement figure. This amount is agreed upon and will effectively terminate your car finance agreement with the lender. The settlement figure comprises the remaining balance of your loan, excluding the interest you would have paid over time. It's worth noting that there might be additional fees included in the settlement figure, so it's essential to review your contract or contact your lender for clarity on the exact amount. If you're considering early repayment, ensure you're well-informed about all associated costs.

Question 8

What is a soft search?

Accepted Answer

A soft search, also known as a soft application, is a way to check your loan eligibility without impacting your credit report. It's like a sneak peek into your loan options without leaving a mark on your credit score. This is important because traditional credit searches can temporarily lower your credit score. With a soft search, you can explore potential loan options and understand your eligibility without any risk to your credit rating. At Moneyrepublic, we use a soft search in our loan Eligibility Checker to help you make informed decisions about your borrowing options without affecting your credit score.

Question 9

What happens if I miss my repayments?

Accepted Answer

If you miss your repayments, it could have serious consequences. It's important to contact your lender immediately if you're facing difficulties. Your lender may provide options to help mitigate the problem, such as restructuring your payments. However, missing repayments can harm your credit score and may lead to a County Court Judgment (CCJ) against you. Additionally, assets secured against the loan could be at risk of repossession. Avoiding missed repayments is crucial to maintaining your financial stability and ensuring future borrowing remains accessible and affordable.

Question 10

What is APR?

Accepted Answer

APR, or Annual Percentage Rate, represents the interest rate you pay on borrowed money. It encompasses the actual interest rate, along with any additional fees or charges associated with the loan. This figure provides insight into the total cost of borrowing. When a rate is advertised as the representative APR, it indicates that at least 51% of applicants will receive this rate. However, individual rates may vary based on factors like creditworthiness.

Question 11

How quickly can I get a car finance deal?

Accepted Answer

The time it takes to get approved for a car loan varies. It can range from a few minutes to a few days, depending on the lender, loan type, and the car you're purchasing.

Question 12

Can I sell a financed car?

Accepted Answer

You cannot sell a car that is still under finance until you have paid off the finance in full. Once the finance is paid off, you will own the car outright and can then sell it if you wish to do so.

Question 13

What is a good car finance interest rate?

Accepted Answer

A good car finance interest rate for used cars in the UK is typically around 8-9%.

Question 14

How can I lower monthly repayments?

Accepted Answer

To lower your monthly car finance payments, there are a few effective strategies you can consider. Firstly, extending the loan term can spread out payments over more months, making each payment more affordable. However, keep in mind that this may result in paying more interest overall. Secondly, increasing your initial deposit or trade-in value can reduce the loan amount, thereby lowering your monthly instalments. Lastly, shopping around and comparing different lenders can help you find competitive interest rates and finance deals that offer lower monthly payment options.

Finance features:	Hire purchase (HP)	Personal contract purchase (PCP)
Requires initial deposit	Optional	Optional
Car is yours at the end of the agreement		Optional
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Optional balloon (final) payment
Avoid excess mileage charge
Secured against an asset (e.g. a car)
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