There is car finance – and then there is specialist car finance. What makes the difference between the two and when are you likely to want to go that extra mile in searching out a specialist car finance provider?
Here are our top ten most frequently asked questions:
As the question suggests, there is no hard and fast answer – specialist cars are those which stand out somewhat in the market and have features that generally distinguish them from other mass-produced vehicles. The Society of Motor Manufacturers and Traders (SMMT) describes specialist cars as those manufactured to low volumes.
So, you might find prestige cars, classic cars, left-hand drive cars, and those that have been modified or adapted in some way to increase their styling or performance.
In the greater scheme of things, you might argue that no special type of finance is necessary – provided a lender is prepared to advance the credit, you have the finance you need.
A specialist car finance provider, though, has that extra knowledge and experience in this particular sector of the market and may help you find not only a suitable form of finance but, some of the most competitive rates.
A specialist provider does not rely on a single lender but scours the whole network of relevant lenders to find the form of finance that suits you and your needs – at a competitive cost of credit.
Specialist cars, of course, are likely to come with a suitably higher price-tag.
Although lenders may vary in their limits on the amount you may borrow, a typical range is between £15,000 and as much as £1 million.
Specialist car finance from a suitable provider may also prove somewhat more flexible than other loans – such as those from your bank or other financial institutions, for example.
Therefore, you might have up to ten years in which to repay your loan.
As with any type of car finance, the bigger deposit you have to put down, the less you need to borrow and, so, the cheaper the cost of any credit you arrange.
Committing your own money to your investment in a specialist car might also increase your chances in securing the loan you need – although some specialist car finance providers may be able to source zero-deposit finance on your behalf.
Any lender is obliged by the financial services regulator, the Financial Conduct Authority (FCA) to ensure that your borrowing is affordable, and you are in a position to repay any loan – and that means a check of your credit history. In doing so, the FCA also helps to ensure that the costs of credit are reasonable (as a press release on the 4th of March 2019 makes clear).
In some cases, your lender may make a charge for repaying the loan earlier than originally agreed, but there are some specialist providers who allow that flexibility without imposing any financial penalty.
Even if you have not yet found the specialist car that suits you, some finance providers offer a sourcing service which scours the available approved dealers to identify those which might fit the bill.
Some specialist car finance providers make things especially easy by paying your approved borrowing directly to the dealer from whom you intend to purchase the car – all you need to do is arrange collection of the vehicle.