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Finance Tips from an Independent Advisor

By: Scott McBride - Updated: 24 Jun 2010 | comments*Discuss
Money Used Car Finance Deal Independent

A lot of money changes hands when buying a used car. For most people, a car is one of the biggest single purchases they will make. It is sensible, therefore, to get the very best offer available to finance the deal. London-based independent financial advisor Paul Stevenson has some top tips to help keep costs to a minimum.

Question: If you had to give car buyers one piece of advice, what would it be?

Answer: “That’s simple – shop around for the best loan deal. It always amazes me how many people spend weeks or even months hunting for exactly the right car at exactly the right price, and then sign up to the first loan deal offered. Remember that loans are like any other consumer goods, so don’t be afraid to haggle in order to land a better deal.”

Question: What is the best way to shop around for loan deals?

Answer: “I would turn to the internet every time. There are hundreds of deals available and many of them are cheaper than the high street banks. It’s far quicker and easier sitting at home with a keyboard and mouse than it is trailing along the high street from bank to bank.”

Question: A lot of people struggle to understand finance deals and loan rates. What should buyers look out for?

Answer: “Well, for a start, never assume that a car dealer is offering the best rate, as the chances are he’s not. Look at other ways to finance the purchase, as these could be cheaper and more convenient. Don’t be sucked in by zero or low percentage deals, as the real cost of borrowing depends on the annual percentage rate (APR). So compare the dealer’s offer with those available from online lenders and high street banks and search for a deal with a low APR.”

Question: Some of the financial gobbledygook can be baffling. What is the best way round this?

Answer: “If the lender uses jargon or you don’t understand anything, ask him to explain. Also, payment protection and other insurances can seriously bump up the cost, so ask to see examples of repayment plans with and without these extras before committing to them. Always ask plenty of questions and find out what all of the small print means.”

Question: Those with a poor credit score may struggle to get a competitive loan. What is the best course of action in these circumstances?

Answer: “I would certainly think twice before opting for a company that offers easy finance to anyone. Most of these companies are reputable enough, but their interest rates can be sky high. A better plan is to sort out your finances in order to qualify for credit from the mainstream lenders.”

Question: What should someone struggling to pay a loan do?

Answer: “The first step for anyone who is having difficulty repaying a loan is to contact the lender. Remember, it is in the lender’s interests that the borrower continues to repay the loan. Every reputable lender will happily rearrange terms to make life easier.”

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