There are many myths and misunderstandings surrounding the process of car finance. These myths may make you feel that you are not a good candidate for an auto loan. These misconceptions may prevent you from obtaining an auto loan, but they are untrue. The first step to acquiring an auto loan is education. There are a number of lenders who specialize in bad credit car loans. You should not be afraid to speak to these lenders because they are more than willing to work with people with bad credit.
The first myth is that you must arrange car finance through the car dealership. Although you can arrange car finance through the dealership, you are not required to do so. You can also get car finance from other companies and dealerships. Be sure to check out your options before you make a final decision. Remember that not all car dealerships offer car finance and you can do so through other companies and dealerships. Choosing the right car finance company can make the whole process much easier.
Another myth is that you have to put a deposit down. While it is true that a deposit is not necessary to purchase a car, you should consider making one. This way, you’ll be able to pay off the car quicker. However, you may find that the interest rate is higher than you expect. Once you start making payments, you’ll be the legal owner of the car. However, if you modify your car without getting the permission of your lending company, you could end up paying more than you need to.
Another myth about car finance is that it is difficult to get approval for it if you have bad credit. Car finance is possible for anyone over the age of 18. The only exception is if you have no credit history. However, car finance can be difficult to obtain without a guarantor. This way, your guarantor can show lenders that you are capable of repaying the loan. You should also be aware that you can still qualify for car finance if you meet the other requirements.
Another myth is that a deposit is necessary for auto financing. In fact, there are a number of options that do not require a deposit. However, the vast majority of car finance agreements require a deposit. This is true for PCP agreements and leasing, but no deposit is required for a personal loan or an HP agreement. In most cases, it’s better to put a deposit down if you plan to make multiple payments on the car, as it will reduce your overall repayments.
There is a myth about car financing that has no foundation. In Canada, you can only qualify for 0% car financing if you’re buying a brand new vehicle. In Canada, 0% car finance requires you to pay zero percent interest on your car loan. This type of financing is unique in the sense that you don’t pay taxes or fees on the principal amount of the loan. This might sound like an ideal situation, but it’s hardly ever a reality.