5 Common Mistakes People Make with Car Loans

To help make things a little easier, we’ve highlighted 5 of the most common car financing mistakes people make, so that you can avoid being caught out!

1. Not having pre-approval before going shopping

Making sure you have pre-approved finance before walking into a dealership is the ultimate power move. 

You can negotiate with confidence safe in the knowledge of your borrowing power, allowing you to secure the bottom line sale price without the salesperson steering you towards their own financing deals. 

2. Not using a car finance broker

As a specialist car finance broker, we’re not tied to a specific bank or lender and so we give you access to our entire panel. In simple terms, this means that you’ll have a variety of options to choose from to ensure that you get the best possible deal out there. 

We’ll also make sure you fully understand your chosen finance option and will guide you through every step of the process, including arranging that valuable pre-approval. 

3. Rushing into it

Buying your new car is a big deal and rightly so, aside from buying a house it could be one of the biggest purchases you ever make and so it’s easy to get caught up in the range of emotions that come with it. 

Try to take a step back and look at things from a wider lens, weigh up the pros and cons of any purchase and your financing so that you can make an informed choice.

4. Choosing dealer finance

Choosing to go with dealership finance could provide a number of disadvantages, which may impact your buying power. 

First and foremost, dealerships don’t have the same access to a range of lenders like a specialist broker would have and so there’s no quick and easy way to compare the terms of the finance you’re being offered. 

What’s more, dealerships have a reputation of offering attractive benefits like ‘interest free’, but it’s often the fine print that’s crammed full of hidden fees and charges.

Remember, arrive with your pre-approval and you’ll always have the upper hand. 

5. Not negotiating well with a dealership

Entering negotiations can be a pretty daunting task and the chances are, the sales person will be a lot less nervous and a lot more experienced than you are – so it’s important to be prepared.

• Have your pre-approval already sorted, that way your upper limit has already been set and you’ve got the upper hand.

• Remember to take your time and not let your emotions take over, take a step back if you need to. 

• Do your research. Make sure you’re as informed as you can be.

• Be prepared to walk away. If the deal doesn’t suit you, don’t take it.