It can often be difficult to get car finance when you have a poor credit rating as many of the main dealers will not be able to provide the appropriate finance. This is typical of many finance companies and credit houses as they rely on the credit rating system that we have here in the UK.
Getting guaranteed credit when you are trying to secure a deal for car finance with bad credit rating can often mean a hefty rate of APR and possibly extra charges for providing such a service. It is a more expensive way of getting credit but the financiers have to hedge their loans by increasing the interest rates on such lending that they regard as risky.
You have several options that you can try if you want to get a car but have been refused credit from your bank or the main car dealers. Depending on your particular circumstances you will have to decide what is the best deal that you can get.
You can approach an online lender that specialises in loans for people with adverse credit. There are two type of loan, a secured loan which is dependant on you providing security which is usually your home. Then there are unsecured loans that do not require any sort of security.
Being able to get the finance beforehand will mean that you will have more choice and more bargaining power when you do come to choose your car. You will have to way up the pros and cons of this as you will want to measure the cost of the finance against any potential savings from being able to choose your new car from the whole of the market.
Your alternative route to car finance with bad credit is buying your car from a specialist bad credit dealer. These are car dealers who specialise in providing both cars and finance under one roof. Whilst this does limit you to the selection of cars it does give you a better chance of getting finance.
At the end of the day you have to decide between the potential cost of any finance, the potential choice of cars and the ease and convenience to you. You need to be aware of any extra costs associated with any finance you are offered such as initial charges and early repayments if you later decide to sell your car on.