The vast majority of consumers will need to borrow money to enable them to purchase a new or used car. Very few people are able to purchase a vehicle outright. A vehicle is a luxury item, and as a result does not correlate to real wages. Vehicle finance allows the consumer to purchase the vehicle over an extended period of time, rather than having a significant initial outlay.
Vehicle finance is broken down into a series of monthly repayments. In some cases this may require a deposit, final payment and ‘documentation fee’. Payments are calculated to include the amount borrowed from the finance provider as well as taxes and fees. In some cases there may be a final payment so that the customer gains ‘title’ to the vehicle, this is known as the ‘balloon payment’. The ‘balloon-payment’ is calculated at the beginning of the agreement. It is an estimated amount known as a GMFV (guaranteed minimum future value); this is so the customer knows how much their vehicle should be worth once the agreement has ended. These are pre-agreed by the consumer and financier. There are many finance options available. Your representative will discuss the best option for your circumstances with you. Should you wish to know more about the types of finance, which are available, please see our information section on ‘Finance Options’.
Vehicle finance brokers negotiate with financiers to secure a financial contract for consumers. The broker assesses the consumer’s financial ability by conducting a credit check. The broker will use the results of the credit check and other factors which indicate a consumer’s financial reliability to decide the ‘risk’ that they pose. ‘Risk’ is reflected in the rate at which the finance is provided; the APR or flat rate.
At Creditas we want you to be informed and make an informed choice about what is best for you. The consumer is at the forefront of our business; we stringently follow the rules laid down by the Financial Conduct Authority (FCA) to ensure that the consumer is cared for and informed throughout the process.
Lee Boyce, ‘Car buyers getting ‘more for their money,’ www.thisismoney.co.ukBack to Products