Direct car finance is a popular form of car finance. Direct car finance is one of the ways of getting a new car if a person has a bad credit history or credit problems in the past. In case of direct car finance, the status of the customer determines the amount of finance that is offered.
The customer has to make requests for receiving written quotations. The APR or the Annual Percentage Rate of interest is variable and it is dependent on the age of the car, the cost of the car, the down payment amount, as well as the term of the contract. There may be the need of a guarantor.
In case of direct car finance, the loan is directly given to the customer by the bank.Direct car finance works quite effectively similar to a good credit car loan taken from a local bank. However, customers having a bad credit history has to pay a bigger down payment amount and a higher rate of interest is applicable.
The maximum number of lenders do not want to lend to borrowers who have a bad credit history because they consider it to be more risky.
Depending on the bad credit history of an individual, down payments for direct car finance may vary anywhere from 20% to 50% and dependent on the credit scores and legal jurisdiction of the state where that particular customer is residing, interest rates may be ranging from 5% to 26%.
The amortization (the required time for complete repayment of loan by means of regular installments) options for direct car finance may range from 2-4 years for bad credit borrowers compared to borrowers with good credit who have the option of repaying the loan in 5-7 years.
The principal advantage of direct car finance is that there is no presence of a dealer acting as a mediator between the borrower and the bank or financial institution.
Some of the leading direct car finance companies include the following:
Honda Car Finance
Last Updated on : 1st August 2013