Having a poor credit score could end up costing you as much as £8,000 extra when financing one of the UK’s most popular cars, according to new research by Uswitch.com.
For instance, the best-selling Ford Fiesta costs £16,645 to buy outright. However, when bought on finance with a four-year repayment period, the total for someone with an excellent credit rating is £20,014 – or a staggering £7,059 more (£27,073 total) for a driver with a bad credit score.
The data was obtained by the comparison and switching service using a car finance calculator to determine the cost of 10 cars bought on finance for motorists with different levels of credit score.
Cost to finance the UK’s 10 most popular cars
|Popularity rank||Car Model||List Price||Finance cost with excellent credit rating||Finance cost with fair credit rating||Finance cost with bad credit rating||Difference between excellent and bad credit score|
|7||BMW 3 Series||£32,595||£39,290||£46,471||£53,147||£13,857|
Plan ahead for a better credit score
James Andrews, personal finance expert at Uswitch.com, reveals how to improve your credit score to help you get the best deal when purchasing a car on finance: “Registering to vote, having bills in your name, keeping to 30% or less of your total available credit (per account) and not having a credit history can all impact your credit score.
“When financing a car, first check your credit report to see what your score is. Secondly, check what’s in there and that the information is accurate. Lastly, start taking steps to improve your score.
“Providing you make your payments on time, don’t apply for many new products in a short period (e.g six months), and keep a stable address, your credit rating should improve. In as little as four months you should see your scores start to improve and after a year you should be in a far stronger position.”