Car dealership financing includes PCP (Personal Contract Purchase) and Hire Purchase (HP) which often comes with low-interest rates. However, in car finance, you must apply for a down payment. Here, the dealer arranging a finance deal for you usually stresses the commission factor he can earn from the contract.
On the other side, they purchased a car through a personal loan granting immense flexibility. Money lenders in Ireland provide car loan grants with the freedom to choose the loan term and repayment schedule per the affordability and existing financial circumstances.
Car dealership companies often offer a finance deal within their available lenders. And thus, they may come with some restrictions. Here the dealer shares complete dominance over the regulation of a contract. He may suggest a used car that he wants to sell at the lowest rates. While with direct lenders, you do not need to worry as they provide car loans on terms that one’s profile is suitable for. Every borrower must meet the criteria of whether they go for a used or new car loan.
Car dealership Financing Vs Personal loan:
Car dealership financing
Dealership financing is the flexibility car dealers provide to individuals to purchase a car. These offer lower interest rates than personal car loans. But balloon payment at the end of the term may impact the finances. Dealer financing options are usually available for new cars. At the same time, one can apply for car loans for both new and used vehicles. The only benefit is you get the convenience of expert help in car dealer financing.
Car Personal loan
A personal loan for purchasing a car is a secured loan. In this, the car works as collateral on a loan.
Here one can borrow a car for 1-6 years at a feasible and affordable repayment structure.
What does purchasing a car through each imply?
If you should go for car financing through a dealership or for a personal car loan, the below table states some parameters:
| Car finance through a dealership | Purchasing a car with a car loan |
| 0% dealership may come with a cost | The direct lender keeps things transparent and avoids any such costs or misleading promises |
| One cannot decipher the exact costs to pay- there could be A fee for 0% interest rates | The very best rates for car loans begin at 3% for a sound credit profile |
| Only-dealer specific options are available. | Wide options to consider as per credit score and affordability |
| The dealer handles all the paperwork on your behalf | You can deal directly with the lender and discuss your requirements |
| You do not own the vehicle at the end of the term | You may own the vehicle immediately |
| Need to pay for regular upgrades | You do not need to pay for anything until you get the car |
While this is just a small glimpse of an idea. Let’s analyse the utility of both in detail.
Can you get car finance with bad credit?
Applying for a dealership car purchase with imperfect credit may be problematic. Dealers prefer a sound credit profile and income flexibility to provide car finance. They cannot lend to somebody with pending CCJs, bankruptcy, or other credit issues.
Even if they find a lender dealing with the case, they do not risk it. There may be only a few dealers dealing with car finance with bad credit in Ireland that you may find suitable for your budget. Even if you qualify, the interest rates and deposit may impact your budget.
Well, if you still want to get a car finance deal on bad credit, you may check the following ways:
- Pay off your existing debts- student loans, payday loans, no guarantor loans, home loans.
- Make only one car finance loan application.
- Get a guarantor on loan. He is someone close or blood relation whom you may trust with your big financial decisions- like a spouse, sister, or brother.
- Generally, car dealership financial companies require a 10% deposit upfront. If you are a good income earner, you may provide a few higher than 10% to qualify quickly.
Note: If you fall behind or stop making your payments, you will lose your car and your credit score too. It would drop significantly as a result. And if you got a guarantor on a loan, his credit score will drop too.
Thus, always consider your monthly budget, income, liabilities, and outgoings before applying for car finance through a dealership.
In opposition to these stringent conditions in car finance, personal car loan providers work towards easing things up for the buyer. Whether it is interest rates, loan repayment terms, or anything, if you are applying for bad credit, you can do so with the help of expert lenders. If the price of the car is higher than what you earn, lenders can sort out an arrangement that fits your needs the best. It could be paying more balloon payments or getting a guarantor or a co-signer on a loan.
Is a same-day car loan – A possibility?
Yes, you may apply for and get quick loans same day in Ireland. The expert car loan providers help you ease up the situation according to the borrower’s affordability and repayment capacity:
- Borrow the right amount as per income and other liabilities
- Choose the right car model as per the market research and utility
- Check the loan application twice after filling up the details. Correct the spelling and information if you find them incorrect.
- identify the obsoletion of the car and how it may impact your finances
- Decide whether you want to buy a new car or a used one as per your purpose, aims, and financial stability
Bottom line: Which is right for me: Car Finance or a Car loan?
So, should you consult a direct lender for your car or get it through a dealership?
The answer is- Go as per your situation and finances reveal. You may contact a direct lender if you wish to exercise more flexibility over interest rates, repayments, and deposits. And can go with a dealership if you find the deal affordable and apt for your financial and personal circumstances. Refrain from settling for one in this case. Explore different dealership options to fetch the best one.