How to Finance a Used Car and Not Get Screwed

This is a guest post by Helen Pritchard. You can also contribute; submit a post on personal finance tips.

If you're about to buy a second hand car, choosing the right type of finance can often be as tricky as selecting the vehicle itself and if you have a less than perfect credit record, it can be much harder. However, you shouldn't have to miss out on your chosen vehicle simply because of an adverse history and for anyone looking to finance a purchase of this kind, there are certain things to look out for. In all probability, if you are buying a car from a dealer, you will be given the option of signing up with their own credit provider in order to help you with the transaction. This is understandably tempting because it offers you the chance to complete the purchase quickly and without having to leave the showroom.

However, when considering the showroom's offer you should pay particular attention to the APR. This is the annual percentage rate offered by the provider and you need to consider how much extra you will be paying in interest over the course of the loan. Essentially, this is true with every lender, irrespective of where they are based but you should be particularly wary at a showroom because the rates are often less competitive in comparison to other providers. Furthermore, if you have an adverse credit history, the dealership may still be able to provide you with a quotation but the APR in this instance may well be much higher than with specialist lenders.

If you're looking for bad credit car finance it pays to be completely honest when searching for a lender. If you have a less than perfect credit history, it makes sense to be upfront about it right from the start. That may sound obvious but it is surprising to learn just how many potential borrowers don't declare such issues. The problem is that the lender will always run a credit check that will highlight these problems and the likelihood is that the borrower is refused and all they have to show is another credit check on their record, which isn't beneficial to their history in any way.

While it may be harder these days to find credit for adverse records, there are many lenders who specialize in this type of loan and it is definitely possible to secure the right finance for your car. One of the major issues though is the APR once again and for consumers with adverse credit, the deals in this respect vary wildly with some APRs stretching to a rate that leaves you paying back a substantial amount during the period of the loan.

So, if you're looking for car finance no matter what your circumstances, make sure to keep all these aspects in mind before you sign up for any loan. Above all, try to shop around for the best deal and look at as many lenders as possible. Make sure that you're completely honest with your information right from the start, as this will ensure that there are no problems of any kind further down the line.

If you've dealt with a pushy salesman in the past -- what tips do you have to come out ahead?

Helen Pritchard writes for both netcars.com, a used car classified website and Car Finance 247 who specialise in helping people obtain car finance deals

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