When you are looking at getting a new car, you will be considering how to finance it. There are a few ways you can finance your vehicle, and it’s important that you know which finance option you are going to go for and how you are going to go about getting finance for this vehicle, and who to go through.
So who are the best car finance providers?
In this article, we are going to go through the best car finance providers, the best finance companies and the best finance rates.
Who are the best car finance providers?
We can’t say specifically which car finance providers are the best, that’s because there isn’t one finance provider that works for everybody. Different providers work for different people.
Let’s be clear, when we talk about finance, we are talking about eventual ownership of a vehicle. If you do not want to own your vehicle at the end of your contract, you will want to look at leasing.
There are a few ways you can get finance. Some internet banks will market directly to you, others will work through finance brokers. These finance brokers will have contacts with numerous banks, all of which want your business.
Alternatively, you can go through a local dealership, or an independent broker. These will have a panel of lenders that will also be keen for your business.
However, different finance providers are suited to different people. For example, there might be a finance provider that is more suited to business customers, or one that is more suited to personal customers. There are also some car finance providers that are better for those with lower credit scores, and there are some finance providers that do not work with those with bad credit at all.
We would recommend talking to two or three independent companies. They will be able to talk to you about your requirements and your financial system and they will be able to offer you the best finance provider for your situation.
Who is the best car finance company?
You will often find that a lot of the manufacturer finance houses are owned by other banks. These include ALD. Lex also own some manufacturer houses and Santander are also getting involved in car finance under a manufacturer rather than just themselves.
Again, the best car finance company will come down to what you are after and what your credit score is.
What are the best car finance rates?
There are plenty of good finance rates out there. If you want to get the lowest rates, then you will be able to find them on the internet.
However, not only will you have to get the best rate but you will also have to negotiate the best price of the car. If you don’t get the best rate of the car then the best rate becomes irrelevant. Therefore, if you look on the internet then you cannot guarantee that you will be able to get the best price because you do not have the buying power that a vehicle broker has.
While there might be some additional charges when you go through a vehicle broker, the buying power they have and their ability to get the best rates and the best discounts outweigh those additional costs, such as an administration fee.
It should also be noted that some of the rates online are not on car finance and are instead on personal loans. You have different rights regarding the car with a personal loan than you do with car finance.
However, the lowest rates do tend to be on a personal loan. It does depend on your credit score of course, but as of November 2017 (when this article was written), a good rate would be 4.9% APR but the APR could be anything between that and 12%. If your credit score is particularly poor then it could be around 28%. That said, getting a car on finance and making the monthly payments on time is a great way to improve your credit score.
What are the best car finance options for private individuals?
There are a few options for private individuals, and which one you choose depends on which you prefer.
You could look at a Personal Contract Purchase. This is where you have a car for a fixed period of time, and at the end of the contract you have three options;
- Hand the car back
- Buy the car for a pre-agreed value
- Part-exchange the vehicle
Watch our video on Personal Contract Purchase below
Your other option is a Hire Purchase. This is where you have your vehicle for a period of time while making monthly payments. When that time is up you own the car with nothing more to pay.
Watch our video on Hire Purchase below.
Another option is getting a personal loan. This can either be from your local bank or the internet. As we said, you do not get the same rights as you do with a Personal Contract Purchase or a Hire Purchase.
There are two types of loan; a secured loan and an unsecured loan. A secured loan is where you put something down as collateral. This is often the most expensive thing in your possession, such as your car or your house. In the case of a car loan, it would be your car. If you default on a payment and cannot pay them back then the lender will take this collateral.
If you get an unsecured loan, then you will not have to put down collateral. The lender will approve your loan based on your credit rating and will trust you to make the payments on time. With a personal loan, we recommend you checking the APR as this will tell you how much you will be paying.
What are the best car finance options for businesses?
Most businesses get a lease contract, rather than getting vehicles on finance. You can read more about Contract Hire here.
However, those businesses that do want to get vehicles on finance will either go through a Contract Purchase or a Hire Purchase. A Contract Purchase works the same way as a Personal Contract Purchase, and a Hire Purchase the same.
You can read more about Contract Purchase here.
In conclusion, we cannot name a specific car finance provider as the best one. This is because there are a lot of great ones out there, but not all of them are going to be best for you and your situation. There are some finance providers that work best with those with bad credit, or if you are a business customer or a private individual. We recommend you talk to an independent broker who will be able to discuss your vehicle requirements and your financial situation. They will then be able to advise you on the best finance provider for you. We advise people on the best finance providers for them every day, so if you have any questions please do not hesitate to contact us.