Will I be accepted for car finance

xleannex19

Hi everyone

Wonder if you can help please….

I’m looking to buy a used car from Arnold clark for £9500, monthly payments are approx £200 and my salary is £42500.

I have had bad credit in the past but most of this has now fallen off my credit file and I now have just a couple of late payment markers from a couple of years ago still showing. However I am at around 80% of my available balance on two credit cards that I hold, this is just because I have recently got engaged and have used the credit cards to make a few deposits for venues etc.

I’m wondering if you think I will be excepted for car finance? I’m really worried about trying incase I get knocked back as I don’t know how strict they are with things.

Can anyone advise?

norsefox

interesting typo on the third last line which totally reverses the meaning of your sentence...

I suppose it depends on how high those balances are on your credit cards as a % of your net income. You do want to make sure that the finance you apply for is the one you get, because refusals on your credit history won't help the next one...

Are you looking to get finance with Arnold Clark? You might get a far better deal, and a better idea of acceptance if you talk to your bank about a loan instead?

Is this for a 60 month financing deal? Can you afford to pay it back in less time?

xleannex19

Well spotted with the typo!

The balances come to about 4% of my annual income so they are pretty low.

Yes I would be looking to get the finance through Arnold Clark. I bank with Lloyds TSB and their rates were showing as 19% when I checked on line, so the monthly repayments are higher.

rmacnair

I've had about 5 car finances in the last 6 years. 3 of which have been over the last 2 years whilst I have been self employed. I've never come across any issues with this and it seems to be that car finance is one of the easier finances to get.

You should haggle with arnold clark though. Don't look at the APR, as this can be calculated in too many different ways and adjusted to make the deal look more appealing; look at the flat rate. The flat rate is where you can make a negotiation. The finance company to Arnold clark will give a base rate of about 5.5% to which arnold clark will add a percentage; this is called interest commission and the higher this is the more the salesman makes. You can't expect them to drop the flat rate down to 5.5% but you can get it down to around 6.5%-7.0%

I wouldn't worry too much about being rejected if your poor credit is in the past. You could always join Credit Expert on a free trial and make sure all your details are correct; that way you can get a good idea of how you stand (bad, average, good, excellent), though don't rely on it too much as they aren't always reflective of what finance companies and their brokers may conclude

EDIT:
Also, the higher the deposit the lower the monthly payment and higher the chances of being accepted for finance

And haggle on the price of the vehicle, you can probably negotiate about £100 to £500 on a car that price

norsefox

xleannex19 wrote: »

Well spotted with the typo!

The balances come to about 4% of my annual income so they are pretty low.

Yes I would be looking to get the finance through Arnold Clark. I bank with Lloyds TSB and their rates were showing as 19% when I checked on line, so the monthly repayments are higher.

19% seems pretty exuberant!

Why not go into your branch and ask them what they'll lend to you at? Assuming you've been with them for a while, they'll already know your income and outgoings and so will be well-placed to know the loan's affordability.

They should be able to do a light-check on your credit worthiness (or some other generic nonsense term) that will not go on your credit history as a request for credit. The branch should then be able to offer you a rate.

This all said, is the Arnold Clark financing attractive?

rmacnair

norsefox wrote: »

19% seems pretty exuberant!

Why not go into your branch and ask them what they'll lend to you at? Assuming you've been with them for a while, they'll already know your income and outgoings and so will be well-placed to know the loan's affordability.

They should be able to do a light-check on your credit worthiness (or some other generic nonsense term) that will not go on your credit history as a request for credit. The branch should then be able to offer you a rate.

This all said, is the Arnold Clark financing attractive?

Unfortunately, banks aren't what they used to be. No longer do they have the flexibility to offer you better rates; 19% is what they'll offer and that's that. I bank with Natwest and for my last finance for £9,000 they said I would have a very high probably of being accepted for a loan but couldn't give me one because I had "sporadic" payments in to my bank as I'm self employed.

quantic

In my experience buying a car from Arnold Clarke is a very expensive way to buy a cheap car. My advice would be to take out a personal loan at a bank and give yourself more power/choice. Majority of people wouldn't even look at Arnold Clarke if it wasn't for the finance options.