There’s no hiding from the fact that buying a car is REALLY expensive. In fact, it’s probably one of the biggest financial outlays you’ll make this year. Or next. Buying a new car has so many benefits though, not least having a decent car warranty to cover you should anything go wrong.
A new car warranty normally covers your car for any faults that occur within a certain period, the length of which varies depending on the make of car and terms of the warranty. It doesn’t cover general wear and tear but nonetheless can still be extremely valuable should anything go wrong with your car that wouldn’t normally be expected to. This would usually includes parts that are defective due to poor workmanship or a manufacturer error.
But how do you afford it?
Unfortunately, not many of us have a big enough pile of cash just lying around to buy our car outright, although you may get some money by selling your car for cash or by trading in your existing car if you have one. You might be surprised at what you can get for it, even if it’s not in great condition, so it’s worth getting a damaged car valuation.
Ultimately though you may have to turn to finance to help fund our purchase. Herein lies the problem: if you’ve got a bad credit rating or have no credit history at all, you may struggle to borrow what you need. So what can you do when not having a car simply isn’t an option?
Rebuild your credit score
It may take time, but with some patience and a little ‘know-how’, it is possible to improve your credit score.
When companies are deciding whether or not to lend you money, they are essentially using your past financial behaviour to predict how you are likely to behave in the future. This is why it can be hard to get finance with both a poor credit history AND if you have no credit history at all.
In order to prove that you’re going to be a responsible borrower, you need to build up a history of responsible financial behaviour. It may sound a bit ‘chicken and egg’ but it is possible.
Credit rebuild cards or short-term finance
You could take out a credit rebuild card (basically a credit card for those with bad credit), then spend a little on it every month. Only spend what you would have spent anyway. Then pay it off in full to avoid paying any interest.
Normally, all other things being equal, your credit rating should start to improve after around 6 months.
Alternatively, short-term loans can be used in a similar way. Just like credit rebuild cards, taking out short term finance may help you to rebuild your credit rating. However, bear in mind that when you take out a loan, you will have to pay interest and maybe extra charges on it, so always read the small print.
Lenders specialising in bad credit
If you need to buy a car urgently and do not have the time to improve your credit rating, there are lenders who specialise in providing loans to people who have a poor credit rating. Often, you will end up paying more interest on these loans, so they could end up costing you more.
Make sure you only borrow what you can afford to repay
If you are going to take out any kind of finance, whether it be a credit card or a loan, make sure you only borrow what you can comfortably afford to pay back.
Buying a car if you have a poor credit rating, or no credit history at all, is difficult but not impossible. There are loan providers who lend to people with bad credit. Rebuilding your credit rating should improve your likelihood of being accepted for finance when you need it and give you more options when it comes to choosing a loan that’s right for you.
I had a look at her website and tried to stick to the style but let me know if anything needs changing.