We work with over 30 loan providers including most of the big brands to help you borrow the money you need.
Eyeing up a new car? The next step is deciding how you’re going to fund your fresh set of wheels. If you don’t have the money to buy the car outright, car finance can make the cost of a new car more affordable by spreading out the amount into monthly repayments.
There are different types of car finance that give you the option to borrow the money you need to buy a new or used car, or lease it for a time before having the choice to buy it outright.
There are different types of car finance available to suit your financial situation, including:
You can take out an unsecured personal loan to spread the cost of buying a car over a few years. You’ll own the car outright from when you take out the loan and pay back the cost in monthly repayments to your loan provider. One of the main advantages is there are....
This is one of the most common options for car purchase. You’ll pay a deposit (usually 10%) and then make monthly payments to a car finance company. You’re technically paying to hire the car and you’ll only own it after you have made the final payment plus any ‘option to purchase’ fees on top...
Put down a non-refundable deposit and borrow towards some of the remaining value of the car - you won’t buy the vehicle outright. At the end of the contract you’ll have the option..
When deciding whether to finance your car with a personal loan or car finance, you’ll need to assess the affordability of the finance type, plus any terms and conditions that might come attached to the different types of loan or contract.
Think about how much you can afford to borrow, how long you want the car for and how you intend to use it. These factors should help you decide on the best car financing option for your needs.
If you’re after lower monthly repayments, you might prefer PCP whereas if you want to own the car once the deal is finished, a hire purchase (HP) plan may suit you best. Another option to consider might be personal contract hire – or leasing.
| Personal Loan | HP (Hire Purchase) | Personal Contract Purchase (PCP) | |
|---|---|---|---|
| Deposit needed | No | Likely | Likely |
| You own the car straight away | Yes | No | No |
| You’ll own the car at the end of the deal | Yes | Yes | No (unless you pay off the remaining balance – but this is likely to be a large final payment) |
| Secured (against the car) | No | Yes | Yes |
| Excess mileage charges | No | Yes | Yes |
| Monthly payments | Yes | Yes | Yes |
If you’ve struggled to keep up with repayments in the past or you don’t have a credit history, you may be wondering if you can get car finance with bad credit.
Your credit score is an important factor that lenders look at when you want to take out a car loan. In simple terms, the better your financial history, the lower interest rates you’ll have access to.
If you do have bad credit, there are still car finance options available for you. We work with specialists in car finance for bad credit, and we might be able to match you with a car loan that works for you.
It’s important for you to work out what your loan will cost you in terms of monthly repayments over the term. Whether you’re looking to take a £5,000 loan or even £15,000, our loans calculator can help you work out how much you can afford to borrow by entering how much you can afford to pay back each month and the length of time you can afford to pay that amount (and at what interest rate.)
It’s worth noting that smaller loans tend to have higher interest rates, which can affect the affordability of your loan – so if you take out a loan over a longer term you should be able to bring the repayments down.
| HP | PCP | Personal loan | |
|---|---|---|---|
| Car price | £15,000 | £15,000 | £15,000 |
| Deposit | £1,000 | £1,000 | £1,000 |
| Total borrowing price (car price - borrowing) | £14,000 | £14,000 | £14,000 |
| Representative APR* | 7.9% | 7.0% | 2.9% |
| Monthly cost | £436.1 | £268.85 | £406.29 |
| GMFV/final payment | N/A | N/A | N/A |
| *With a perfect credit score **Assumes 45% of car price | |||
Find the right car finance option for you and see which rates you’ll be guaranteed to get
Decide which car finance option is right for you, from PCP or HP to taking out a personal loan
Just tell us a little about you, your finances and what you’re looking for
You’ll be able to sort car finance options by overall cost and the likelihood you’ll be accepted
You generally have to be over 18 to get a car loan, and lenders will often have their own specific requirements. You can find out more by looking at their website or contacting them directly, by phone, email, or post.
A secured loan is a loan you can take out that’s tied to an asset of yours as security. For example a mortgage is a type of secured loan, and the asset would be the house you take the mortgage out on – when you repay the loan the house is yours, but if you don’t repay then the lender could seize your house.
A secured loan is a loan you can take out that’s tied to an asset of yours as security. For example a mortgage is a type of secured loan, and the asset would be the house you take the mortgage out on – when you repay the loan the house is yours, but if you don’t repay then the lender could seize your house.
A secured loan is a loan you can take out that’s tied to an asset of yours as security. For example a mortgage is a type of secured loan, and the asset would be the house you take the mortgage out on – when you repay the loan the house is yours, but if you don’t repay then the lender could seize your house.
A secured loan is a loan you can take out that’s tied to an asset of yours as security. For example a mortgage is a type of secured loan, and the asset would be the house you take the mortgage out on – when you repay the loan the house is yours, but if you don’t repay then the lender could seize your house.
An unsecured loan isn’t tied to any collateral, and as a result you normally need at least a fair credit score to qualify. There is also often a maximum amount you’ll be allowed to borrow.
