It’s exciting, and it’s challenging, but you’re starting on the road to owning your first car. For those with a provisional licence though, it can appear a lot more complicated and the process of finding provisional license car finance can be even more challenging. But if you take the right approach, you will be able to make your way and pick out the best vehicle for your needs.
Assess Your Budget and Financial Situation
Before you begin your car buying process, check your finances. Don’t forget to factor in the cost of the car, plus insurance, fuel, maintenance and road tax. Setting a realistic budget will make sure your finances aren’t overextended and you can afford ongoing costs.
Determine Your Loan Affordability
Assess how much you can reasonably borrow by calculating your monthly income and outgoings. You can use online calculators to estimate repayment amounts and interest rates to determine if you can afford to repay the loan.
Choose the Right Vehicle
When you’re new to driving, choosing the right car is all about finding the right balance between practicality, affordability and what you like. Instead of opting for luxury, go for the models that are known for being reliable and cost efficient.
Consider Fuel Efficiency
The cars with better fuel economy will ultimately save you money. To cut road tax and reduce your environmental impact look for models with lower CO2 emissions.
Evaluate Insurance Costs
Provisional licence holders tend to pay higher insurance premiums. To cut these costs down, look at vehicles in lower insurance groups and telematics based policies that reward safe driving.
Explore Financing Options
When you’ve found a suitable vehicle, it’s then time to look into financing. Knowing the various types of loans available will assist you in picking that which best suits your situation.
Personal Contract Purchase (PCP)
PCP agreements give you flexibility in that you pay less each month and decide if you want to buy the car at the end of the term. However, be aware of mileage restrictions and condition requirements.
Hire Purchase (HP)
The HP agreements are when the cost of the car is spread over fixed monthly payments. Once the final payment is made, you become the owner and this is a simple and transparent option.
Guarantor Loans
For example, if you have a limited credit history, a guarantor loan might be for you. If you can’t make the payments, this option gives a trusted individual to step in and pay if you default, increasing your likelihood of approval.
Build Your Creditworthiness
By improving your credit score, you will improve your chances of getting better financing deals. Make sure you pay on time for any existing bills, pay down outstanding debt, and don’t make multiple credit applications in a short time.
Compare Lenders
You can compare the options offered by lenders. Don’t just look at interest rates: repayment flexibility, fees and customer reviews should all be considered. Tailored advice and packages may be available from specialist lenders that only target new drivers.
Final Thoughts
As a provisional licence holder, navigating car finance is tricky. Knowing your financial situation, getting to know your options and getting advice from a professional will help you take the first steps to car ownership confidently. It doesn’t have to be a stressful or expensive affair when you own your first car; with the right strategy, it can be possible.
