In an ideal world, you’d be able to rock up and pay for your brand new dream car or motorbike there and then with cash, but of course, this isn’t always possible.
This is why it can seem very appealing to pay for your new vehicle using finance, but one of the main questions that people have is whether or not they could be prevented from buying a car or bike on finance because they have a bad credit rating.
For whatever reason, people’s financial circumstances often change over time, which could mean that while you’re in a secure financial position now, your credit rating might not reflect this.
At first, this might make it seem tricky to secure finance on a car or motorbike and while some dealers might be so accommodating, thankfully, there’s a wide range of lenders available to you, which means that usually, poor credit shouldn’t stand in the way of you and your dream vehicle. You just have to take a bit of time to find the right one!
Many lenders are available, such as SuperbikeLoans.co.uk, which specialise in providing loans for vehicles to those with bad credit.
Be sure that you take some time when selecting a dealer though, because if you start making lots of applications at once, then this could actually start to hurt your credit rating.
Different lenders all offer different terms and rates which will all depend on a range of factors surrounding you and the vehicle in question.
Of course, these rates are primarily calculated based on risk and a good credit rating means you are a lower risk and will obviously help you to qualify for lower rates.
However, all hope is not lost, as you should still be able to pay for your vehicle on finance, you’ll probably just have to pay a higher rate.
When you do come to talk to a dealer, be sure to be upfront and honest about your financial situation (have a recent credit check carried out by a site such as ClearScore before you go), so that they can work with you to find the right finance option for you.
Another option which could make your finance payments easier is to pay a larger deposit up front, which will mean you have to borrow less, so can make lower monthly payments, or you could also try to overpay on your monthly payments to make the payment quicker.
On the other hand, if you’re still struggling to find a lender who is willing to offer you a car or bike on finance, you might want to think about ways you can improve your credit rating.
Obviously, this isn’t ideal when you want to buy a new vehicle right now, but it’s going to be beneficial in the long run.
If you’re looking for more information on the various ways in which you can finance the purchase of a vehicle, check out this guide from the Money Advice Service.
