Call Us Free: 0800 36 88 133
Follow Us:

Car loans

Finding you the best deal on your car finance

car loan

Car loan mistakes that cost you money.

If you want to save money on your next car purchase, you'll need to do more than just haggle a "good" deal by with the salesman on the forecourt. A mistake on your car loan could cost you money and obliterate any savings you've negotiated on the purchase price.

The big mistakes to avoid are made in the organising the finance of your new car. Making the right decisions can save thousands over the life of the loan.

1. Negotiating the monthly payment rather than the purchase price.

Buying a car based on the amount of the monthly payment is the biggest trap. Although you should know what you can afford each month, never provide that figure to the salesman. If you do, you will lose any power to negotiate a lower purchase price. Don't let the saleman turn you into a monthly payment buyer. A monthly car loan amount tells the dealer how much room is available to hide other costs such as a higher interest rate and add-ons. You should negotiate the price of each cost category separately. Using this technique minimizes the individual pieces of negotiation Price, Trade In Value and the Car Finance Rate.

2. Letting the car dealer know or find out your credit score

Your credit score determines the amount of interest you will pay on your car loan. Your credit score is your creditworthiness as a rating and is based on your credit report with the major reporting agencies, Equifax and Experian. A borrower with a high credit score qualifies for a better car loan rate than one with a low score. Shaving just one percentage point of interest from a £10,000 car loan over 60 months would save hundreds of pounds in interest paid over the life of the loan.

Check your credit score now for free >

Once you've checked your credit score you should apply for pre-approved car finance before visiting the dealership. This way you can find out how much vehicle you can buy and the interest rate you qualify for.

3. Refinancing negative equity.

"Negative Equity" is the term used to describe owing more on your car than it is worth.When a dealer tells you that he can include that negative equity into the car financing of the next deal, they mean that he will add it to the purchase price of the new car. You will be paying interest on that negative equity for the term of the new loan. Moreover, if you were in negative equity on your last trade-in, it is likely that you will be in far more negative equity. This practice just keeps making the problem worse. Don't get into the cycle by buying a more expensive car than you can afford. Live within your means.

4. Including add-ons in the finance deal

Nearly 40% of car dealers profit is derived from the sale of "add-ons" such as extended warranties, fabric protection and body treatments.

Even if you want an extended warranty or your seats scotchguarding, these items are available at a lower cost from sources outside the dealership. Putting them into your car loan and paying interest on them for the life of the loan can add hundreds of pounds to the amount you pay.

Our car loan specialists can quickly advise you on the cheapest car loan available. Simply call the team FREE on 0800 088 2208. Alternatively use the car loan finder and find your best deal.

no credit on prepayment meter

What to do if your prepayment meter has run out of credit

  • by Admin
  • June 23, 2015

This guide explains what you should do if your pre-payment meter for gas or electricity runs out of credit....


phillips cohen associates

How to deal with a Debt Collection Letter from Phillips & Cohen Associates

  • by Admin
  • June 22, 2015

Have you received a letter from Phillips & Cohen Associates. In this guide we'll show you a common letter they send, the tactics they use and how to deal with...


attachment of earnings

A Guide To An Attachment of Earnings Order

  • by Admin
  • June 23, 2015

Have you received a letter threatening an attachment of earnings. In this guide we explore what an attachment of earning order is, how they work and how to defend...


Connect With Us

Find Your Best Car Loan!

Partner Centre

Latest Tweets

Latest testimonial

Fantastic service

I needed help with my pension. Money Advice Online arranged for an IFA to come to my house free of charge and talk me through everything. I can't recommend them enough.


Join 100,000s of Money Advice Onliners who read our WEEKLY email. Get our round up of ALL the best money saving tips, best buys, discount vouchers and competitions. Don't miss out!

* indicates required

We hereby promise to be responsible emailers.

Contact Us
  • Address: Digital World Centre, 1 Lowry Plaza, The Quays, Salford, Manchester, M50 3UB
  • Phone: 0800 36 88 133
  • Email: [email protected]
  • Monday - Friday: 8:00 am - 9:00 pm
    Saturday - Sunday: 10:00 am - 4:00 pm Bank Holidays: 10:00 am - 4:00 pm

Money Advice Online and are tradings name of ATN Group Limited © 2020 All right reserved.
Registered office: Kemp House, 160 City Road, London, United Kingdom, EC1V 2NX. Registered in England and Wales. Co Reg No. 11846763 is a comparison service that acts as an introducer to companies who offer regulated financial advice (FCA approved). Our website is completely free for you to use but we may receive a commission from some of the companies we feature. does not provide any advice and we are not liable for any financial advice provided by, or obtained through a third party. As with any investment, the value of investments can fall as well as rise and maybe worth less than what was paid in. Past performance is not an indicator of future results. does not provide any regulated debt activates in relation to debt counselling or adjusting. You can also get free impartial debt advice by following this link to the Money Advice Service.

Bankruptcy Advice, IVA