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the right financing deal for your car

We compare offers from
a wide range of lenders from across the market

We work with over 30 loan providers including most of the big brands to help you borrow the money you need.

How does Car Financing work?

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.

What types of car finance are there?

There are different types of car finance available to suit your financial situation, including:

Car loan

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....

Hire purchase (HP)

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...

Personal contract purchase (PCP)

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..

What is the best
financing option for you?

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

Can I get car finance with bad credit?

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.

What will my loan cost?

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

How to compare car finance with
MoneySuperMarket and our partner Motiv

Find the right car finance option for you and see which rates you’ll be guaranteed to get

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Car finance powered by our partner Motiv