For many years we have seen the car loan market flourish. With low unemployment, positive financial futures and a general feeling of financial security, there were so many car loans available that virtually anyone could get car finance. Then along came the biggest economic downturn for many years, and the brakes have been well and truly applied to the global economy and in particular lending markets.

What does this mean to the regular person on the street who wants to buy themself a new vehicle? Well the main thing that has happened is that lenders have tightened their lending criteria. Due to economical uncertainty, job losses and rising costs, lenders are more cautious with whom they will lend money too. They feel the risk of defaults is higher, so they are more careful when approving finance for cars, boats, trucks and other equipment.

The follow on affect from this is that the amount of brokers who can get you a cheap car loans has now shrunk dramatically. This is particularly true when the loan being applied for is a non standard loan. Bad credit loans, self employed loans, no deposit loans and other non conforming car loans options have become few and far between.

Many of the tier one lenders, such as banks and big finance companies, now limit the amount of non conforming car loans they are willing to offer to the market and particular brokers each month. So many car finance brokers find it impossible to exist in today’s environment. They simply cannot turn over a high enough volume of car loans to make ends meet.

Less competition might sound bad for the consumer but it is not necessarily the case. It has become more important for those seeking car loans to do their homework. Interest rates are no higher than before, as long as you can find the right broker to secure you the deal. It is still likely to be more expensive to go directly to a bank or lender directly.

One danger is to resort to disreputable lenders or ‘fantasy loans’ that offer 0% interest, or two years interest free. Nobody lends money for free and you should be aware of that from the beginning. Any loan mentioning such offers have a catch, potentially a very expensive one.

You should stick to established respected lenders who can still offer a wide enough amount of car loans options to suit your situation. One that can sum up your financial situation and future economic position to recommend the cheapest loan option available for the vehicle you want to buy.

When deciding how much you can afford to borrow, more variables should be considered than just the interest rate. You need to allow for the added costs of registration, vehicle insurance, any other necessary insurance, running costs, possible repairs, the potential of higher oil prices, and any account fees associated with the car loan.

These costs should be included when calculating your monthly repayments. This will help you to budget how much you can afford to borrow and also prepare you in advance with your day to day budgeting.

Best Car Loans

A good car loans broker will have a wide variety of car loans depending on your situation. The more lenders they can utilise or the bigger, better quality their borrowers are, the better chance you will get the best car loan. Smaller brokers in the current finance market will always find it more difficult to get car loans that is actually right for you, and may try to push a loan because it is one they still have the ability to sign.

One word describes the current world economy...unpredictable. This means you should also be searching for a flexible loan, especially for new vehicles. Check the conditions if you want to pay out your car loans early or refinance to a different loan.

Having a loan already arranged for the amount you know you can afford also gives you more buying power when you go to buy your vehicle. You know your limits and the seller will need to compromise to meet you demands. It will also reduce their ability to trick you into using finance companies they are associated with, whose conditions you may not fully understand.

It is more important than ever to do your research when applying for a car finance loan. Stick to the trusted established car finance brokers with strong financial backing and avoid offers of free finance or convenient car loans with lots of fine print and conditions.