Buying a car can be one of the biggest purchases you will make in life so it’s important that it’s the right choice for you and your pocket. Car finance is now the most popular way to fund a car purchase and for many drivers it’s easy to see why. With the cost of living at an all-time high and new and used cars prices higher than they have been for many years, more drivers than ever are choosing to spread the cost. The guide below looks at 5 top tips to help save you money on your next car finance deal and a few steps you can take even before you start making applications with lenders.

Car finance is always subject to status, and you will need to receive a car finance approval first before you can start choosing the car you want. The decision to offer you finance is ultimately in the lenders hands and if they feel that you can’t afford finance or don’t meet their finance criteria, you may be refused a car loan. This is worth keeping in mind before you start applying.

1. Use a car finance broker.

Save time and hassle by using a car finance broker to help select the best car finance deal for your circumstances. Car finance brokers are usually free to use and work on your behalf to find you the best deal from a range of trusted lenders. Brokers are essentially the middleman between you and the lender and have access to multiple lenders at once, this can help to speed up the process and protect your credit score as you only need to apply for finance the once. A broker can then help to select you the lowest interest rate from a range of finance products, helping to save you money.

2. Compare deals with no deposit options.

It’s a common to assess whether you need a deposit for car finance or not. Whilst there are many cheap car finance deals with no deposit, sometimes a deposit may be required by the lender to secure the deal so it’s worth keeping in mind. If you’re looking to lower your car finance payments, it can be beneficial to put more money down at the start of your deal to help reduce the cost. A deposit can help to lower the loan amount which means you don’t have to borrow as much from the lender, and you may get charged less interest for borrowing a lower amount.

3. Improve your credit score.

Car finance applicants with the best credit scores get rewarded by getting access to the lowest finance rates. A good credit score can indicate that you can handle loans and finance responsibly and are less likely to default on any future loans too. Lenders will usually always require you to undergo a credit check when you apply for finance to see where you fall on the credit scale. It can be harder to get a car on finance when you have bad credit as you are more likely to default on loans in the future. If you have bad credit, it can be a good idea to work on your raising your credit score to get a better rate and save you money.

4. Compare insurance rates first.

Before you commit to getting a car, it can be worth comparing insurance rates for different vehicles. There are a number of factors that can affect your car insurance premiums, but the type of vehicle can be one of the biggest. Some cars cost more to insure than others and you could be costing yourself more money by choosing the wrong vehicle.

5. Stick to your budget.

You should always set a budget for buying a car, whether you’re buying with cash or finance, it doesn’t matter. Your budget should always be priority and make sure its affordable and realistic. Car finance can give you access to cars within your budget which you may not afford with cash alone and it can be tempting to get carried away with optional extras offered by dealers. However, you should try to stick to a budget you can afford.