5 Ways to Save Money on Car Finance

It is estimated that around 90% of people purchase a new car on finance such as PCP. However the rates that you pay every month are dependent on a number of factors. In fact, two people that buy the same car at the same dealership at the same time often come out with two different prices.  

From buying at the right time or negotiation hard at the dealership, there are many ways that you can save when purchasing a car. In this article, we list X ways to save money on car finance.

Negotiating at the Dealership

When you arrive at the dealership, be prepared to use negotiation skills to get a price that is best suited for you. You can use the below negotiation tactics to find yourself the best deal available:

  • Reject the first offer that you are given
  • Start at a much lower price point than the one that is advertised for the car
  • Don’t be afraid to walk if you are unable to get the right price for you
  • Speak to multiple staff at the dealership
  • Visit more than one dealership to find the best price
  • Bring in offers from competitors, advertisements, and magazines

Buy at the Right Time

“Car dealers have particular targets that they need to meet each quarter,” explains Gavin Cooper, the founder of ClaimsBible.com who have seen a huge surge in mis-sold car finance in the last year.

“It is therefore advantageous to buy a new car closer to the end of these target periods because the dealership will be more likely to slash prices and offer you a better deal”.

“Based on quarterly sales, the best times to buy are at the end of March, June, September and December. Not only can prices be cheaper during these periods, but they may offer large deposit contributions on their models.”

Similarly, it is important to try and avoid busy periods such as peak summertime where people are looking to buy convertibles or perhaps wanting to buy cars as a reward for their children’s exam results or college journeys.

Ensure that you are looking for a new car during quieter periods of the year, where bargains will be easier to find and negotiations for better prices may go more smoothly. 

Buy Pre-Reg

Pre-reg cars can provide opportunity for a real bargain, and can come with a discount of up to 70%, because these are vehicles that are purchased up to 6 months before by the car dealership so that they can hit a particular target.

Despite being brand new, these vehicles are classified as used, since they have technically already had an owner. Better still, the car dealer has already hit their sales target, so you can drive an ever harder bargain on these cars. 

Like the vehicles used for test driving, or those used in showrooms, pre-reg cars are brand new, but are cheaper because they are not out of the box. Dealers will be looking to sell these as quickly as possible, so you are in a good position when you begin to negotiate.

Better credit score means better rates

Generally, the better your overall credit score, the better rates that you should receive on a car loan. This is predicated on the idea that you are considered to be at a lower risk of default because you have successfully repaid other types of credit on time in the past.

Of course, credit score is not the only factor in the rate that you will receive. Income and affordability will also play a part. Even if you have a good credit score, you may be limited if you have a considerable mortgage, several other cars, and other sources of debt.

For young people who have no credit or little credit histories, and for those who have bad credit histories, there are a few things that you can do to improve your credit score in the short-term, such as joining the electoral register and canceling any small credit cards that you do not use.

In the long-term, you can improve your credit score in a number of ways. These methods can include consolidating and paying off any debts and using a credit builder credit cards to build your score.