Perhaps you have heard of guaranteed car finance? Possibly you have already considered the idea of taking out guaranteed car finance, maybe because you have already been declined car finance or car loans elsewhere?
Certainly if your credit is not brilliant you may find it difficult to obtain credit in many places, and even your bank may well turn you down for a car loan. The past year or two has been fraught with difficulties, pressures from work, lost jobs, interest rates soaring, and creditors becoming increasing desperate and insistent.
Those companies previously only too willing to shower us with offers, enticing us to take out credit, apply for credit cards, loans and other finance packages have become increasingly twitchy and far more reserved.
Even those people with mildly poor credit histories are finding it hard to obtain credit in the way that seemed quite easy only a couple of years ago. If you've been forced to miss a few payments, paid a few bills a bit late, maybe even defaulted on a loan, your credit history will have this recorded, and it is this which may well be stopping you from getting car credit finance.
On the other hand you may very possibly have emerged from the past two years debt free, having never paid a bill late or had any credit cards or loans. If you have no credit history at all, because you've never previously had a credit card or loan, then you may well find yourself being declined for credit and for car finance packages. Why is this?
It may seem unfair, but from the point of view of the car finance companies and other financial lending institutions, you're an unknown quantity - a completely unpredictable risk, and in the current economic climate, an unknown or unpredictable risk is not acceptable.
So for all sorts of reasons you may have found yourself considering a guaranteed car finance deal. But what should you be aware of, what should you look out for, and what are the common assumptions or misunderstandings relating to guaranteed car finance arrangements? Here are the top four myths or misunderstandings about such arrangements:
1. One of the myths relating to guaranteed car finance is that the whole idea of guaranteed car finance is a myth! It's true - people don't believe it really exists, and in spite of the adverts, the leaflets, the campaigns, the websites and the posters, many people don't even begin to pursue the idea because they believe that it's just an advertising ploy, and that there will be a catch, or that it won't apply to them. The shame is that almost every one of these people who give up before they've even begun could well have found that they'd be able to obtain car finance, and could be happily driving around in a new car rather than moping dejectedly about how unfair life is!
2. Another myth is that any guaranteed car finance arrangement will rule out the possibility of finding cheap car finance. People often assume that any guarantee implies steep interest rates and fees. This isn't the case - at least not with reputable finance firms. You'll always find a few less reputable companies unfortunately, but if you shop around you'll be surprised. Just because it's guaranteed doesn't mean you'll be offered a higher interest rate - it just means that the car is used to secure the loan instead of your credit history and reputation.
3. People who have perhaps previously dipped their toe in the water may have discovered a firm offering guaranteed car finance, but with a catch. The catch can be that you're only allowed to spend the car loan on one of the few selected vehicles offered from the finance company's own showroom. This means that you have no flexibility on price, and a very restricted choice of vehicle. However, this doesn't have to be the case, and there are plenty of car finance firms who will be happy to offer a guaranteed car finance deal, but who will still let you choose any car you want, from any dealer you want.
4. Some people believe that having a guaranteed car finance arrangement can harm your credit history, since future credit companies may consider it a sign that you have not had a good credit rating previously. This is complete rubbish, since firstly no other company is going to know whether the car loan was guaranteed or not, and in any case, as long as you keep to the payment arrangement you'll actually be doing your credit rating a great deal of good. Every time you make a payment on time, your rating increases, meaning that a guaranteed car finance arrangement can not only help set you free from your old banger, but can actually help put your low credit rating behind you, increasing your credit score and your chance of obtaining credit in future.
![[Valid RSS feed]](http://www.qualityfreearticles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites