The freedom and mobility of car ownership can seem like a pipe-dream for those of us who struggle with bad credit.
But this need not be the case. Click here to see why!
With Pay As You Go Financing, you have the opportunity to own your own vehicle, pay it back in reasonable instalments and increase your overall credit rating.
What is Pay As You Go car financing?
Pay As You Go (PAYG) car financing is a car repayment system in the UK designed to help those with low credit scores obtain their ideal cars without finding financing through mainstream lenders.
PAYG is a type of Hire Purchase agreement between yourself and a car financier or lender.
What’s a Hire Purchase agreement?
A hire purchase agreement exists between two parties, one who is making a loan and one who is receiving it (that’s you).
In this agreement, an initial down payment is made. The balance of the payments, plus interest, is paid in scheduled monthly repayment instalments.
The transfer of ownership occurs only once all instalments, plus interest has been paid to the lender.
This means that, once your repayments have been made, you become the owner of your own car! It also means that the higher your initial down payment, the less your monthly instalments will be.
You have control over your money, and that gives you greater control over your life. Couple that with the control of movement you get with your own car, and you have that freedom that once seemed so inaccessible.
This type of car financing is also known as Black Box Financing.
Called this because of a black box that is placed in the car to help monitor payments.
More on this in a moment.
Why would you use Pay As You Go car financing?
Pay As You Go financing differs from mainstream lending in one major way.
PAYG financing is an option for those with a bad or no credit score to back themselves up. Credit scores are a way for lenders to know that they can trust in your ability to repay loans timeously and consistently.
A low credit score is often the unfortunate reminder of a challenging period in your life and can seem like a permanent scar of those tough times.
But they are not permanent, and you can come back from a bad credit score!
Part of the value of a PAYG payment system is that it actively assists your credit score. With every reasonable payment, your capacity for future loan assistance increases. And you’ll get to own your own car in the end!
What is a Black Box, and why are they putting one in your car?
A Black Box is, well, just that, a Black Box.
This Black Box is placed in your new car by a reputable technician of the lender’s choosing. It is generally discreetly placed under the dashboard or glove box of the car.
The Black Box is an electronic device connecting to an internal computer and communicating information to your lender via a GPRS system.
This nifty piece of technology is installed in your car by your financier for three purposes;
- To serve as a reminder when your instalments need repaying.
Each Box is fitted with a light that blinks either green (when you are within your monthly instalment period) or red (when you need to pay your next monthly instalment.)
- To control your ability to drive if you default on any payments.
When you pay your monthly instalment, you will receive an activation code that allows you to keep driving throughout the month when typed into your Black Box.
If you fail to pay, the Black Box will communicate with your lender via a GPRS, and you will no longer be able to drive your car.
- To provide reassurance to your lender or financier.
Black Boxes show that you are serious about making your repayments. In general, Black Boxes prove to lower repayment default rates and are known to (because of the consistency they create) increase the overall credit rating of those who use them.
Pay As You Go car financing is a safe and affordable way not only to own your own car but to also lift yourself out of the dilemma of bad credit.
Get into the driver’s seat and steer your life in any direction you want to take it.