mortagesandforeclosures

by Peter Smith

At some point in life we all find it difficult to steer through the world of credit. If we have too little, we can get declined for loans and mortgages on the foundation that we are not able to provide any financial responsibility; however, if we have too much we can get punished for been unable to live within our means. Of course, the world of credit allows us to buy the things we have always dreamed of like a house, car or maybe a well deserved holiday.

In particular, sometimes credit can be a useful instrument or a great way to obliterate your existing finances.

Getting a car loan is no different. Used intelligently a loan for a car can help build up your credit, enabling future lenders to see that you are a trusted borrower with a great track record. However, you should only obtain car finance under specific conditions, and if any of the following circumstances apply to you, do not take out finance on your car!

You have a less than perfect Credit History. Are you really in a spot to pay thousands of pounds in interest just because you've had the misfortune of a few late repayments. In all probability NO. This is fundamentally why (if you have bad credit) you should always save for your next car purchase instead of paying over the odds in elevated interest payments.

Older cars offer a higher spec for my money. It's a well known piece of information that you can get more car for your money if you look at models over 3 years old. However, remember that old cars (regardless of make) tend to break down sooner or later, and that would leave you with a car still to pay for that is currently off the road. Watch out for dealerships that offer cheap financing deals on a possible clunker, especially if the life of the loan goes beyond two years.

SUV's are safer. Although it's a well known fact that SUVs boast a good safety record, they are rapidly going out of fashion. Let's face it, they're BIG, noisy and not easy on the wallet either! Whatever you do don't finance an SUV!. You'll be paying more in interest for the foreseeable future than what the vehicle would be worth in a year or two.

The Automaker Is Going Under. Yes, the dealers of vanishing automakers are absolutely desperate to sell their cars - however, you need to be careful of financing these cars, since your warranty is not guaranteed. This means that should you get into an accident, you'll have to pay thousands out of pocket for repairs, or buy a new car altogether. Again, the option of paying off two loans for the price of one is not too appealing - so don't do it!

In summary, help yourself by buying a car that fit's your budget or that can be paid off within a couple of years - you will be financially better off for it!

About the Author:

As the lead author for loans today, Eric Medd has written several general articles within the finance industry, and also specialises in the procurement of secured loans.

Get all the information and photos:: http://mortgagewide.info/why-financing-a-car-is-a-bad-idea/