It's every car buyer's nightmare. You've found the perfect car, at the right price, and you've applied for the finance. Then suddenly the finance manager shakes his head and it's all over. Many of us need a car to get about, so what other options are there to get yourself on the road?
Take A Guarantor Loan
4 Things You Can Do If You've Been Refused Car FinanceCompact Cars, Bridgend
February 24, 2017 at 10:51 AM
Guarantor loans are currently making a comeback and this could work to your advantage. A guarantor loan is where somebody else, perhaps your partner or a family member, agrees to pay the loan if you default on your payments. If you've got a poor credit rating, this reassures the lender that they'll get their money back. Be very careful with these though, because if you fail to pay then your guarantor is liable... and they'll be very unhappy.
Improve Your Credit Rating
There will be a reason why the finance company refused your finance application, but they won't always tell you. So it is well worth accessing your credit report from credit reference agencies such as Experian and Equifax, to see exactly what's going on. Your report will show you if you've missed payments, overstretched yourself financially or just have too many credit accounts. There are many ways to improve your credit rating, which do take time, but you'll be a better prospect to lenders. Here are some ideas:
- Close accounts that you no longer use, for example unused credit cards that are eating into your affordability
- Demonstrate you can handle credit responsibly, for example using a credit card and paying it off in full each month
- Make more effort to pay off outstanding debts such as credit card balances
- Always make your monthly payments on time, because missed payments can make you look irresponsible
Save For A Car And Pay In Cash
Perhaps your credit rating may take a while to recover from past issues, and your only short term option is to save up for your car and pay for it in cash. This will take discipline and time to save enough, but at the end of it you'll own your car outright, without owing any finance. Consider a high interest savings account that lets you lock away money in exchange for a better interest rate, or automatically transferring a set amount each month into savings via standing order.
Stick With Public Transport
Perhaps you can't get credit and have little capacity to save for a car, let alone paying for tax, insurance, fuel and running costs of a car. So maybe it's worth sticking to trains, buses and taxis for the time being until you can save up.
Can Compact Cars Help?
There is one other option... Compact Cars offers a Pay As You Go scheme that offers low deposit deals. Even better, all applications are accepted whether you have good or poor credit. Get in touch for more details.