4 things to look out for on your car finance agreement
So, you’ve found your dream car and a finance option to go with it. But before you sign on the dotted line, you should always read your full finance agreement to make sure you understand exactly what you’re agreeing to and give you peace of mind. Your account manager will be happy to talk you through your agreement too. Here are just four of the things you can look out for…
Check how far you can drive
Depending on the type of finance agreement you choose; you might have to agree to drive less than a certain number of miles each year. Before you sign, make sure you know how many miles you usually drive in a year and whether this is likely to increase or decrease over time. Will your commute stay the same for the next few years? Or will you move to a new house? You can also check how much you could be charged for going over your mileage limit.
Check the car’s condition requirements
Just like mileage restrictions, some finance agreements ask you to keep the car in a certain condition. This could mean agreeing to avoid any big bumps or scrapes (or at least get them fixed), having regular services, or making sure you follow general car maintenance guidelines. Check how much you may be charged if you fail to keep the car in good condition. If you’ve had a few accidents in the past or don’t think you’ll be able to keep up with the required maintenance, it might not be the right finance agreement for you.
Check your payment schedule
Make sure you know when your payments will be taken every month and how much they’ll be. Your payments might be fixed so they’ll stay the same every month or vary. If you like to pay all your bills at the start or end of the month, ask your lender whether it may be possible to change your payment date to one that works for you before you sign the agreement (it could be harder to change this once your agreement is live). That way you’ll know exactly when and how much you’ll be charged and be able to prepare so you don’t miss any repayments.
Check the listed charges
You may have checked your APR and payment terms but with some finance agreements, there may be additional charges too. A Hire Purchase agreement, for example, may include an ‘Option to Purchase’ fee at the end of the payment term while a personal loan could have an arrangement fee. Read the full agreement carefully so that you’re aware of all the possible charges you’ll face so there are no nasty surprises further down the line!
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