What bad credit means for car finance

If you're looking to purchase a new or used car but have bad credit, you may be concerned that a finance plan is out of reach. However, this isn't always the case, although the terms you're offered will likely differ from those given to drivers with a good credit score.

Less attractive terms

Your low credit score means the perceived risk that you won't keep up with payments is higher. You should therefore expect a higher APR amount, which can raise the overall cost of your next vehicle if you enter into a lengthy contract. A larger deposit amount is also likely to be required, so that your creditor has some form of financial security.

 

A narrower choice of cars

 

With potentially higher overall costs, you may find your budget limits you to lesser-priced vehicles. Although that perfect model may therefore be beyond you, the quality of today's cars means cutting-edge technology and many other attractive features are often offered as standard.

 

Opportunity to build a good score

Should you opt for a finance agreement despite your bad credit, it is a good opportunity to build the score back up to a healthy amount, meaning future car purchases are enjoyed with better terms.

Making sure you can meet all payments should be the first consideration when thinking about financing a car, and Lookers can help you understand the rest. Contact your nearest dealership to discuss your options with one of our experts.

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