Do you worry about whether you are eligible for car finance? Do you realise that finance options and lending criteria have changed significantly since you purchased your last car, but you are not sure how to financially look your best for a new application? Look no further, we interviewed our accredited finance expert Aoife Keehan PIB APA, and together with Windsor we have put together the following advice and top tips to help you make the best finance application you can in 2019.
Windsor Business Manager Aoife Keehan PIB APA has over twelve years’ experience working in people service and people care environments with world class multi-national organisations. She is Windsor Galway Nissan & Mazda Business Manager, is an Accredited Product Adviser in Loans and Regulation and a Member of The Institute of Banking.
Aoife do you have any top tips to help applicants look their financial best when assessing car finance applications?
Aoife’s Advice to You: When it comes to agreeing to a car finance application we are essentially saying that you have enough means to meet your payments, and that you can make those payments in a reliable and consistent fashion. You can strengthen your application by demonstrating the following:
Top Tip 1: Monitor how you spend your money – ensure that your bank statements look like you can tell between luxury and necessity. As a business manager, I much prefer to see bank statements than payslips and an unspent €150-€200 remaining regularly at the end of each month in your current account rather than a pattern of spending down to the last cent. If you are upgrading your car for instance, your payments will increase and I need to be confident that you can absorb that extra cost.
Top Tip 2: Use direct debits for your bills and have credit arrangements already in place on your current account bank statements. Also, it is good to see the same current account used to receive wages or salary payments and that will help me to assess your means best. The more transparency you can provide regarding your means, the more accurate our assessment will be regarding our decision to grant you your car finance application.
Top Tip 3: Always pay your direct debits, and always pay them on time! Remember that a business manager is looking for you to show that you are responsible and timely in your contractual commitments. Good direct debit management is often a key criterion on which a car finance application will be granted or rejected.
Top Tip 4: Often the best way to show me that you have financial discipline is to have a savings account. As a minimum, I like to see €25 savings per week or at least €100 per month, and savings means savings, for the most part savings need to stay in the savings account until they are required. If you have a savings account and use it like a current account and withdraw monthly then proof of savings will not help your application.
Top Tip 5: Having a good credit history is of course important to any business manager, but having had bad debt is not necessarily a barrier to receiving a yes. If you have had bad debt and were, or continue to be, proactive about paying it or are still paying at the new agreed rate for at least 12 months with your new contract, then you can show that you know how to keep your finances achievable and your costs affordable when you experience a change of circumstances. At Windsor we have many finance options to facilitate you, so do pop in or call us for advice.
Q: What would help me speculatively estimate whether I could afford car finance at any given time?
Aoife’s Advice to You: We are always here to chat and offer advice, but it does help us when you call or make an enquiry to know how much you are spending per month, and how much you have left over to absorb the cost of a new car finance payment. I would advise that you work out your budget for the past month as a starting point. What did you start with and what do you have left once you pay for utility bills, rent, mortgage, loans, credit card, overdraft, grocery, travel, and personal savings plan etc.
Also, document everything, and if it helps use your bank statements to make sure to account for all outgoings. Remember that the first thing that a car finance business manager really likes to see at least between €150-€200 left over regularly at the end of each month in your current account.
Any further advice to offer our reading applicants?
Aoife’s Additional Advice to You: As a guideline, if you cannot afford the quoted monthly payments on a car having put a 20% deposit down, then you cannot really afford that car, but don't be put off - ask our Sales Executives if they have something more affordable to closely match your ideal choice. Also, if applying for Personal Contract Finance (PCP), try not to overly fixate on the rate unless it is a special 0.0% rate which could not be better for a PCP applicant, it is also important that the monthly installment will be affordable for you for the duration of the contract to avail of the full benefits that PCP finance offers.
Aoife’s Additional Advice to You: Shop around and test drive your choices but don’t overthink your purchase and don’t overshop… When you have your finance approved and you are ready to collect your purchase, you should be excited. I often see customers so exhausted from requesting quotes and taking test drives that they are simply relieved. Luxury purchases should be a joy, so enjoy shopping!
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(Photo credits: Windsor Group and Pixabay.com)