#car loans 4 u
Guaranteed Car Financing
Guaranteed Car Finance
“Is there such a thing as guaranteed car finance, and if so, should I take it?
Let me dispel any illusions you have about guaranteed car finance deals. No company in the UK can currently guarantee you car financing or a higher purchase plan. It’s impossible to do without the lending company going into administration at a rapid rate.
To guarantee car finance to anybody would mean offering loans to those that are unemployed, very elderly, very recently bankrupt (it’s illegal to obtain credit within 12 months of filing for bankruptcy), or dealing with colossal debts that would make car financing repayments impossible to maintain.
I hear ads on the radio every day about companies that are offering guaranteed car finance. It’s just a marketing angle to convince people to apply, as a percentage will be deemed lendable.
Best chance ever
There are now more lenders that ever and the criteria to accepting an individual for car finance has been eased over recent years. So there is a realistic opportunity for many people to access car finance that perhaps couldn’t have just five years ago…And there are a few great companies around such as Car Loans 4 U or Zuto – more on that in a moment.
What’s the catch?
If you have a poor credit history but still qualify for a car finance agreement there is a price to pay, and it’s a financial one.
Firstly, some interest rates on poor credit finance deals are extraordinarily high. While a high street lender can offer loans at a base rate of around 7% (subject to status of course), a poor credit lender can charge anything from 12% base interest rate right up to 25%. I have even seen some companies charging over 30% base interest rate.
So that means you’d pay £300 interest for every £1000 borrowed. But it’s actually more than that when we calculate using APR which often includes fees and charges that may be spread over the period of the loan.
So, poor-credit finance can be an expensive business for the consumer. Not only is the credit expensive but the cars are often grossly over-priced as well. When you add it all together you can be paying thousands and thousands of pounds more for a car than you otherwise might.
Question: Do you want to be making payments of let’s say, £154 per month, almost three years into a finance agreement, when the car has depreciated and is now worth less than a £1000? This is a common scenario and one you could easily find yourself in if you opt for car finance from an expensive lender.
Finding a better lender that will actually accept you
I’d like to add that there are some reasonably good credit lenders (that deal with prime and sub-prime clients) on the market today. Sure their interest rates can be a little higher than the bank, but they don’t reach the scaly heights of 25% interest.
Here, I’m gonna focus on one such lender. I’ve done a lot of business with them over the years and found them to be contactable and affordable for consumers with excellent customer service and follow up.
Zuto Car Finance (formally Car Loans 4 U)
The company work a little differently from most other car finance companies as you can apply for a loan before you’ve found a car (recommended.) If and when you’re accepted, you’ll know how much money you are spending on a car, the loan repayments and other terms of the loan. This gives consumers an opportunity to reflect on the finance proposal and decide if it’s an affordable option.
If you decide that the package isn’t right for you, there’s no obligations and it’s fine to just say no.
Zuto or Car Loans 4 U. do NOT sell cars themselves. They only provide the finance for them.
What are the criteria?
I can’t give you any perfect answer here, but I can give you a good idea of what’s required…
Zuto have a panel of lenders, and are able to consider car finance applications from people with a wide range of financial circumstances.
You may still apply if:
You have little or no deposit (subject to certain terms of course)
You have some poor credit against you
If you’re self-employed
If you’re young ( but at least 18 years old have a good credit rating)
If you’re not on the electoral role
If you’re in the Forces (must have a UK address other than barracks)
If you need to refinance your existing car
If you’ve found a car privately (this is dependent on certain criteria including the particular panel lender and the vehicle in question, as age and mileage restrictions apply)
If you’ve applied for credit elsewhere in the last few weeks or months Car Loans 4 U will initially conduct a soft search which doesn’t leave a trace on your credit file. The soft search is enough to determine the likelihood of lending
If you need finance for a commercial vehicle or motor bike
Adverse credit, missed payments or arrears
This loan company have several lenders who will provide finance to people who have missed previous payments or have a poor credit rating. But as I’ve spoken about already, there are no guarantees here and the only way to really find out if you’ll be accepted is to go ahead and apply.
If you have an IVA (individual voluntary arrangement) Car Loans 4 U will require a confirmation letter from your Insolvency Practitioner that they are happy for you to access finance again. If your IVA has passed and been settled then you’re fine to go ahead and apply.
Bankruptcy – If you’ve been bankrupt in the last 12 months you do NOT meet the qualifying criteria. If you’ve been discharged from bankruptcy for at least 12 months you may be considered for finance but this is under some strict guidelines.
CCJs – If you have outstanding CCJs you’re still able to apply for finance as long as the CCJ is more than 4 weeks old.
If you apply and you’re accepted, you’ll know how much money you can spend on a car and the exact terms of the loan. Next you can begin searching for cars that meet the criteria of your lender. Age and mileage are the main factors that determine if a lender is happy to finance. Generally, the car needs to be less than 10 years old and certainly fewer than 100,000 miles. Ideally the car should be a maximum of 8 years old and under 80,000 miles.
Once you’ve found a car at a dealer and you’re happy to proceed, you’ll need to tell the dealership that you have finance arranged with a lender.
Telephone Zuto (Car Loans 4 U) and inform your adviser that you’ve found a car and want to buy it.
Your advisor will then contact the dealership directly and work through the details.
From a dealer’s point of view, Car Loans for You can be a little frustrating to deal with. They want lots of information, invoices, warranty details etc.; before they’ll make a pay-out to the dealer. But for you, the consumer, it’s all good because Zuto Finance go to great lengths to ensure the car is legitimate and worth the money being asked.
Tip: Ask your advisor to request that the dealership add a 12 month warranty into the deal free of charge. This is a good thing to do and most dealers will agree if it means closing the deal and getting paid out.
It can take several days for the lender and the dealer to work all the paperwork out and get the agreement signed off. Once they do you’ll be able to pick up your new car and drive into the sunset.