How does car finance work?

[TheAngryDog]

Call me daft, but it is something that I've never taken out etc, so I've never looked into how it works.

I am told that the finance is secured against the car, is that correct? In which case does that mean anyone can effectively get finance on a car, even with poor credit?

I've always preferred to own cars out right and still do, and my next car will be the same, but I guess it is just interesting to see how the "other side" of car buying works.

[photosnob]

No. It's perfectly possible to be turned down for credit when buying a car. Most second hand dealers will have other lenders for those with really bad credit histories. If you are recently bankrupt or have lots of CCJ's you have no chance.

A car's value isn't absolute. You could smash it up and ruin it. So ultimately they are taking a gamble on you.

[TheAngryDog]

photosnob said:

No. It's perfectly possible to be turned down for credit when buying a car. Most second hand dealers will have other lenders for those with really bad credit histories. If you are recently bankrupt or have lots of CCJ's you have no chance.

A car's value isn't absolute. You could smash it up and ruin it. So ultimately they are taking a gamble on you.

Thanks for your reply. I assume that GAP insurance is supposed to cover those loses of the car's value?

[photosnob]

TheAngryDog said:

Thanks for your reply. I assume that GAP insurance is supposed to cover those loses of the car's value?

GAP insurance won't cover if you ruin the car - it will cover if you write it off. If I smoke in my car and urinate all over the interior, then it's worth less. I could end up using the car for a gardening business and absolutely trashing the interior. How much would you pay for a car which had things growing inside it? lol

[Mound Dawg]

photosnob said:

GAP insurance won't cover if you ruin the car - it will cover if you write it off. If I smoke in my car and urinate all over the interior, then it's worth less.

Having worked a a car dealers that sold large MPVs I can confirm that some people apparently do this. The inside of a person's car affords a fascinating glimpse into their private life and often it isn't very nice.