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Everyone dreams of owning a new car no matter how new the one you are driving is. Once that honeymoon period of a couple of weeks passes you will have moved on to your next car purchase in your head. There are some key points that will help you to improve your credit score and get far better rates on your next car loan, and by following these you may find you can afford a slightly better car. Hopefully then the honeymoon period will last at least a week longer.
What's the score?
The first thing you should do is find out your credit rating. This can done online and usually for under £10. By looking at your credit score you may find that some of the items on there that are lowering your score are old items that have now been dealt with. Ring up the company who have registered this item against you and ask them if they will remove it. Always be polite when taking this approach and more often than not it will work.
If you find a showroom round the corner from your house that says they will give credit to anyone regardless of how bad their credit rating is, this means it is more than likely that the price of the car you want is very high indeed and the interest rates offered will probably be astronomical too. You should try to avoid this scenario. Different underwriting departments from different lenders will have different levels that they consider a risk worth taking but almost all companies will offer you better terms if you have a higher credit rating; there is no harm in enquiring before you start the ball rolling.
New or used?
This is another important decision that can have a very heavy effect not only your car loan but also on other car related payments like tax, insurance and repairs. A new car offers you a comprehensive warranty from the manufacturer that will cover you usually for at least three years and it will have the latest technology installed with few of the nasty surprises that can be associated with used cars. Unfortunately, though not everyone can afford the high prices of a new car and owning a second hand car does have its advantages. Insurance costs are likely to be less on a used car and it will depreciate in value much less.
Can I really afford it?
You should always ask yourself this question even if you've just seen the car of your dreams with all the extras fitted. You must consider your personal circumstances and whether buying your dream car will mean you get kicked out of your dream home or lose your dream possessions. Take into account any change in circumstances you are likely to see during the term of the loan. Be honest, because you really are only lying to yourself and you may regret it in the long run.
Once you've tackled all these problems and potential hurdles to getting your dream car and you've decided on the car you want to buy its time to shop. Look around for the best possible deal you can get and when you find it apply for the credit to purchase it. Remember that the more deposit you can afford to pay now the less you will have to pay back on your monthly car loan repayments.
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