Getting car finance online vs in-person – which is better?

You walk along the path to take some fresh air threading your way through the crowd, having tantalising smells of roasted chicken waft on the evening breeze, and then suddenly. Something catches your eye. It is a grand white Mercedes car behind the glass door boasting of its swank body as if it has been waiting for you.

“I wish I had money to pay for it outright,” you think in your mind. Your heart feels slightly cringed, maybe disappointed, but then you decide to walk up to the showroom in the hope that you will find another car that is not out of the question for your budget.

Buying a car is actually exorbitant. Even if you have been stashing away for it for years, you will find that you need to fund it from a reputed bank or direct lender. You can finance your car through online lenders or in person.

In order to save money, it is vital to find out which of the options is budget-friendlier. A deal has to be analysed based on the interest rates, the repayment term, the instalment size, other fees and charges, etc.

Online car finance

Online car finance is a very simple process. You do not need to be drawn in the paper legwork. To get started, you will have to provide personal and financial details. Car finance includes hire purchases and personal contract purchases. Not all direct lenders offer these types of finance options. Most of them deal in auto loans, in other words, personal loans.

If you are directly contacting a direct lender, make sure you do research beforehand. They must be providing the deal that you are looking for. Contact a broker if you do not have to do research. As they have a panel of a lot of lenders, they will introduce you to a lender that provides the finance deal you are looking for.

Here are the benefits of getting a car finance deal online:

  • You can get a car from anywhere

One of the greatest benefits of buying a car online is that you can buy from anywhere, anytime. It is not necessary that you choose a nearby car dealer as you can pick the one who is further afield in the UK. Just make sure that the Financial Conduct Authority authorises the dealer you are picking and provides you with an affordable deal.

  • You can compare multiple lenders

It is vital not to take words blindly from car dealers. You should be cautious so you do not end up ruing the day. It depends on your financial circumstances and how likely the loan will cost you. For instance, buyers with a good credit history will have an added advantage compared to those whose credit history is abysmal.

Likewise, you will see the variations when you apply for guaranteed car finance for self employed because you will have to submit additional documents to give more clarity about your repaying capacity.

In case your credit score is not up to snuff, you will have to increase the down payment, but that does not offset your abysmal credit score, meaning you cannot escape higher interest rates.

Since the overall package varies by lender, it makes sense to compare before you apply to any.

  • It saves time and effort

Financing a car online is easy, convenient and straightforward. Some people are under the impression that it is time-consuming, but it is not. You can get funds smoothly if you apply directly to a lender or a broker.

In-person car finance

Online financing lacks real-time experience. You may have several doubts and queries that seem to be impossible to be answered remotely. Therefore, you may prefer to have your car financed directly from a dealer in person. Car dealers may offer you their own car finance deals, or they may have a tie-up with other lenders. Note that they may not have as large a panel of lenders as that of brokers.

Here are the benefits of car finance from a dealer:

  • Personalised experience

Buying a car from a dealer will let you enjoy the buying experience. You can easily explain your financial circumstances to your dealer at the time of purchasing a car. This enables them to choose a car that best fits their budget. Further, you can easily ask them if you have any queries or doubts. This sort of facility is not available when you look for a finance deal online.

  • Negotiation scope

You have a scope for negotiation when you are buying a car from a dealer in person. They will likely show you a couple of cars after knowing your financial circumstances, not to mention they would also like to know your choice. Of course, prices might be up and down. You can negotiate for lower prices. The sale price is quoted, leaving room for negotiation, so do not fight shy of doing it. Stick to your offer unless the lender lowers the price. This will have a long-term impact on your budget. The interest rate will go down, and this is crucial, especially if you are looking to fund it with a 10,000 pound loan with bad credit.

Which option is better?

Both options have their own pros and cons, and it also depends on an individual choice. Getting a car from a dealer is more beneficial than buying it online, as you can negotiate for the price and look around at other options as well.

But as far as it is about financing your car, you can do that online. Brokers or direct lenders will offer you better deals than car dealers. Although you have the option to opt for hire purchase (HP) and personal contract purchase (PCP), you should consider taking out auto loans from a direct lender. They are more affordable than HP and PCP. Note that car dealers’ in-house financing deals do not include personal loans. They are either HP or PCP.

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