Bad Credit Car Loans compared
Your guide to all Bad credit car loans
Bad credit car loans are suitable for those with any type of credit rating and can be acquired instantly online.
Car Loans - £2000 Grant Means a Good Time to Buy
Now that the £2000 car scrappage scheme has been introduced in the UK, it could be a good time to take out a loan for a new vehicle.
The £2000 car scrappage scheme was introduced by the UK Government in order to boost sales of new cars to aid the motor industry, which has been hit by the recession. The other aim of the scheme was to reduce the number of older vehicles on the roads, as they are less environmentally friendly than newer models.
Under the scheme, which took effect from 18th May 2009, motorists can receive a £2000 trade-in allowance for their old car when they buy a brand new motor. This only applies to vehicles that have a current MOT certificate, are over 10 years old, and are registered with the DVLA or currently on Statutory Off Road Notification (SORN). The person claiming the allowance must be a UK resident, and must have been the registered keeper of the car throughout the last twelve months, up to the date of the new car purchase.
The scheme allows the motorist to purchase a car or small van up to 3.5 tonnes, which has been registered as a new car in the UK after the 18th May 2009. The new vehicle must be registered to the same owner as the old car. This can certainly help people obtain bad credit car finance.
Many people could find that, despite the benefits of the scheme, car dealerships still turn them down for a loan because of a poor credit history. However, it is still possible to obtain a loan elsewhere often for use at the same car dealership, and there are many car loan providers catering to people with a poor credit history.
Car loans aimed at this sector of the market may offer less favourable terms than those offered to people with a good credit history, so it pays to shop around. Borrowers can get an idea of the credit terms and interest rates by looking at the provider's websites, meaning that they do not have to risk getting turned down by numerous providers before finding a suitable one. Many credit brokers will also let you have a no obligation quote by filling in an online form giving a few basic details, such as: amount of loan, employment status and amount of salary.
Another option is to take out a personal loan, which could be used for any purpose including the purchase of a new car. The lender may ask for the loan to be secured against the value of the car, so that, in the event of default, the lender can take the car as collateral in order to pay off the loan. However, the advantage of taking out a secured loan rather than an unsecured loan is that the amount of the loan will usually be higher, and the repayment term longer. Secured loans generally also have lower interest rates.
The car scrappage scheme will only operate until March 2010, so now could be the best time to invest in a new car.