If you’re purchasing your first performance car, then you might need to anticipate a few raised eyebrows when it comes to loans and other related car financing.
The good news is though that there are options available – if you look in the right places.
Why performance car borrowing can raise eyebrows
In theory, it shouldn’t matter if you’re looking for funding of say £15,000 for a family saloon or £100,000 for a performance vehicle.
It should all be a question of a lender doing some simple maths relating to whether or not you can afford the repayments, coupled with a credit history check. If you can afford that £100k and are a good credit risk, then logically, the funding should follow as a matter of routine.
Unfortunately, for some lenders it’s not so simple.
The problem is that some car finance and other related lending organisations are just not really into the top-end performance and luxury marketplace. They just won’t be comfortable with the typical sums involved in performance car finance.
They may equate the vehicle and loan amount with an unacceptable degree of risk to themselves and decline to offer finance. Alternatively, their pricing may be heavily loaded to compensate for their own uncertainty.
The bottom line is simple – you may not be able to walk into just any car finance provider and find an attractive deal.
If you’re looking to finance that performance vehicle, you’ll typically be facing two options:
- if you’re purchasing from a dealer, there’s a fair chance they’ll push their own financing option quite strongly;
- to look for a specialist provider of performance car finance.
Let’s consider the two.
Whether you want to or not, you’re likely to see the propositions here prominently displayed along perhaps with interest rates (AER).
These can be objectively reviewed on their own merit but keep in mind one critical point:
- the price you negotiate for your vehicle and the cost of any dealer-provided finance may be linked. If you’re 100% dependent upon getting your finance through the dealer then your negotiating position on the price of the vehicle itself might be compromised. In other words, in the view of the dealer, you’re not a cash or personal finance buyer.
By contrast, if you have finance in principle in your pocket from another source, you’re in the driving seat (no pun intended) when bargaining on the vehicle’s price.
Remember, although performance cars are sought after, they’re also expensive. In many cases buyers won’t be plentiful and you should have scope for serious negotiation if you have your own finance available.
There are providers of performance car finance who won’t wince at the sums involved. Some will even offer Hire Purchase type funding, meaning that you can repay the sum involved over several years, after which time the vehicle will become legally yours.
That might be attractive both in terms of overall cost but also in allowing you to segment the business of driving a deal on the car away from trying to get a finance deal.
To obtain such funding, you’ll typically need to:
- find a deposit of perhaps around a minimum of 10% of the total vehicle cost;
- provide evidence that your existing income/expenditure position will allow you to maintain the repayments;
- satisfy the funds provider that the price for the vehicle is sensible when viewed alongside its age, mileage and the traditional “book value”;
- meet certain credit history check requirements – though having problems on your credit history files is by no means an inevitable showstopper.
All things considered, there is no need to put up with frowns when trying to find performance car finance. Just contact a provider who understands that segment of the marketplace and have an initial discussion.