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Published on May 6th, 2014 | by Pete

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Car Finance – Myths dispelled

I remember the feeling of getting my first car. It was a bit of a banger to be honest, an old Ford Fiesta, but I loved it, even though it was quite a dodgy sky blue colour. I named it Malcolm, I think mostly because I did not think it was fair that all modes of transport were considered female. I’m not sure that this was really an important issue, but it seemed to bother an 18 year old me. Anyway, why am I banging on about this? I think it’s because now I have a better car, one more befitting my progress in the world. Okay…it’s a Toyota Corolla, but still, I love it. He’s called Gilbert by the way!

Many of us probably make do with a car that is well past its sell by date, or one that might be costing us a fortune every time we need an MOT. Lots of us fall into the trap of thinking that a cheap car needing a few bob spent on it to get it through the MOT makes sense, but it can often be a false economy. It can be quite scary working out how much has been spent on maintaining and repairing an older car, and quite surprising to discover that the same amount of money might have paid for a newer car that was not quite such a money pit.

I’m not saying that everyone should rush out and sign up to car finance – that would be nonsense, and very bad advice. I am saying though, that for some people, it can be affordable, and make financial sense. Clearly everyone’s situation is different, so you will need to clearly think about all of your current commitments before deciding to sign on the dotted line. There are some classic myths about car finance that exist though. Here are a few highlighted by the folks at Stoneacre:

o You must get a car loan for the full cost of the car
o You can only get a car loan for a new car
o You need perfect credit to get a car loan
o You must be a homeowner
o You must be over the age of 21
o You can only finance one car at a time
o The credit blacklist
o You need collateral to get a new car
o You are stuck with a car loan once you have one
o You must have a deposit
o You need to have been in a job for years

If one of the above myths has stopped you from thinking about car finance before, it might be time to re-evaluate. You may decide that car finance is still not for you, and that of course, is fine. But, it may well be worth just having a think about it again, to see if it is a good fit for you.

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