The demand for car finance is growing rapidly, but many drivers don’t understand the different types of car finance options available, how and when to use them, where to access car finance, or the implications of taking out a loan.
If you are confused about car finance, Volkswagen Financial Services can help; as we decode the most common car finance myths for you.
You can’t pay off car finance earlier than agreed.
Not true, you are allowed to pay off the outstanding balance in full at any time during the course of the agreement and no lender can refuse this. However as with other types of finance, this can incur some charges or penalties, so it’s best to check these before signing anything.
Shopping around for car finance ruins your credit score
Stick to ‘soft credit searches’ when shopping around for quotes until you’re sure the deal and provider is suitable to you and you want to make a full application.
Once you go past this point you’ll incur a hard credit check against your credit profile. There is no hard and fast rule but making full applications for finance from multiple lenders within a short period of time, whether car finance or otherwise, could set alarm bells ringing for providers and impact your credit score, even if your intention was simply to shop around.
Not everyone can apply for car finance
Whether you have defaults, or rents to pay, anyone can apply for car finance. If you’ve just started a new business, have a job or are self-employed, this shouldn’t make things difficult. So, it’s a myth that you can’t get car finance due to employment status.
Getting car finance is slow and you’ll miss the car you want having to wait
Some traditional finance providers or car dealers might need written personal details before finding a deal for you, which could take some time. But these days you can do it all online. You could get a quote online in less than 5 minutes and completing your application won’t take much longer. Or you could just contact us, at Volkswagen Financial Services for a hassle-free and quick loan approval.
Having car finance will give you a bad credit rating
Having a car finance deal in place and making your repayment on time can actually show other lenders, you could be considered a ‘low credit risk’, compared to other people with no credit.
However missed or late payments could make you appear as a higher risk to other lenders, so it’s important to choose an affordable deal and to make payments on time.
If you need some advice regarding your car finance, we can help. It can be quite a worry when you read either online or in newspapers about the many myths surrounding car finance. Put all the myths out of your head and enjoy searching for a car of your dreams. No matter what your circumstances are, Volkswagen Financial Services is by your side.