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LATEST READ What is PCP car finance? Read Guide
LATEST READ What is PCP car finance? Read Guide
Types of finance available and how they work.
Types of eligibility, find out if you qualify for car finance.
About credit checks, types of bad credit finance and more.
How applying works, how much you can borrow and more.
Private and new sales, documents needed and more.
Types of payments, how they're made and more payment details.
Car finance works by paying a set amount of money each month to the bank or lending institution responsible for your deal. This amount is usually more than the car’s monthly payment, so you’re really borrowing the difference. The loan is then paid off over time, typically three to five years. At the end of the loan, you either pay the remaining balance or trade in the car for a new one.
💡 Want more information? Check out our guide on the pro’s and con’s of car financing.
There are many types of car finance available, with the most popular being PCP finance, HP finance, guarantor finance and no deposit finance.
PCP: PCP finance is a loan repaid in monthly instalments over a set period of time. At the end of the agreement, you have the option to either hand the car back to the lender, or pay off the remaining balance and keep the car.
HP: HP finance is also repaid in monthly instalments over a set period of time. At the end of the agreement, the car is yours.
Guarantor: Guarantor finance is a type of loan that allows you to rely on someone else if you cannot keep up with payments. Your guarantor must be someone who has a good credit history and can afford to repay the loan if you are unable to do so yourself.
No deposit: No deposit finance is a type of loan that allows you to borrow money to purchase a car without having to first make a down payment. The loan is then repaid in monthly instalments over a set period of time.
HP, or hire purchase, is a type of car finance where you pay off the cost of the car over a period of time, typically between 2 and 5 years. At the end of this period, you then own the car outright.
PCP, or personal contract purchase, is another type of car finance where you also pay off the cost of the car over a period of time – but in this case, you don’t actually own the car at the end. Instead, you have the option to either buy the car for a set price or hand it back and walk away.
💡 Want more information? Check out our guide on the differences between HP & PCP car finance.
A personal car loan is a loan that is taken out in order to purchase a car. The car will be used as collateral for the loan, and the borrower will usually have to make monthly payments until the loan is paid off. Personal car loans can be used to purchase new or used cars, and they can be obtained from a variety of sources, such as banks, credit unions, and online lenders.
A guarantor car finance agreement is a type of car finance agreement where a third party, known as the guarantor, agrees to guarantee the repayments of the loan in the event that the primary borrower defaults on their payments. This can provide peace of mind for the lender, as it ensures that they will be able to recover at least some of their losses in the event of a default. It can also be helpful for borrowers who may not otherwise be able to obtain a loan, as it allows them to borrow money with someone else’s financial backing.
💡 Want more information? Check out our guide to guarantor loans.
Leasing a car is similar to renting a car. You make monthly payments and at the end of the lease, you can either choose to buy the car or return it. If you choose to buy the car, you will need to pay the residual value.
Financing a car means that you are borrowing money from a lender in order to purchase a car. You will make monthly payments and at the end of the loan, you will own the car.
Negative equity is when the amount of money that is owed on a loan is greater than the current market value of the car. This can happen when the value of a car declines or when someone takes out a loan against the value of their car that is greater than the actual value of the home.
No deposit car loans work in a very simple way – you borrow the money to buy the car and then you pay it back over time. The loan is secured against the car, so the lender knows that they will get their money back, even if you can’t make the payments. This means that you don’t need to put down a deposit when you take out the loan, which is why they are called no deposit car loans.
The main disadvantage of no deposit car loans is that they tend to be more expensive than regular car loans. This is because the lender is taking on more risk by giving you the loan without a deposit. However, it’s still worth looking into these loans if you can’t afford to put down a large deposit on your new car.
There are a few ways to refinance a car. The first way is to go through your bank. The bank will look at your credit score and decide if they want to give you a loan to refinance your car. The second way is to go through a car loan company. This company will usually have higher interest rates, but they may be able to give you a loan even if you have bad credit. The third way is to go through an online broker. Brokers allow you to compare interest rates from different lenders so that you can find the best deal possible.
💡 Want more information? Check out our guide on how to refinance your car.
When you take out a pay as you go car finance agreement, you will need to make a down payment on the vehicle. This is typically a percentage of the total cost of the car, and will be around 10-20%. You then pay off the rest of the cost of the car in monthly instalments. The difference with PAYG finance is that you’ll be fitted with a black box, which will be temporarily disabled if you fail to make your payments.
0% interest car finance refers to a type of loan where the borrower does not have to pay any interest on the principal amount for a fixed period of time. This type of loan is typically offered by car dealerships to customers who are buying a new car. The dealer will finance the entire purchase price of the car and the customer will not have to make any interest payments for a set number of months. At the end of the promotional period, the customer will start making regular monthly payments on the principal amount borrowed.
Anyone over the age of 18 who is employed and has a good credit history is likely to be eligible for car finance in the UK. Lenders will look at your income and outgoings to decide how much they are willing to lend you, and will also want to see a record of responsible borrowing. If you have had any County Court Judgments (CCJs) or defaults on your credit file, you may find it more difficult to get approved for car finance.
Yes, you can get car finance with no deposit. However, it’s important to note that you’ll likely have to pay a higher interest rate if you don’t put down a down payment. Additionally, you may also be required to purchase additional insurance coverage.
Yes, you can get car finance in the UK if you’re self-employed. There are a number of different lenders who offer car finance to self-employed borrowers, and each lender has its own eligibility criteria. Generally, you’ll need to have been self-employed for at least two years and have a good credit history. You may also need to provide proof of your income and your business expenses.
In the UK, it is possible to have two cars on finance at the same time. This means that you can borrow money to buy two cars and then pay back the loans over a period of time. However, there are a few things to consider before taking this step:
The first thing to think about is how you will afford the monthly payments on both cars. If you can’t afford the payments on two cars, you may want to consider selling one of them.
Another thing to think about is how you will use the two cars. If you only need one car for your daily needs, it may not be worth it to have two cars on finance.
Finally, make sure you are aware of the risks involved in taking out two car loans. If you can’t make your monthly payments, both cars could be repossessed.
There is no definitive answer to this question as it depends on the lending company and the terms and conditions of the finance agreement. However, most lenders will not offer car finance to anyone under the age of 18, and some may only offer it to those over the age of 21. This is because car finance is typically offered to borrowers who are considered to be low-risk, and young people are seen as being more high-risk borrowers. In terms of a maximum age, this tends to be around the age of 70.
The answer to this question very much depends on the lender that you choose to work with. Some lenders will require you to have a job in order to be approved for a car loan, while others will not. However, it’s important to remember that you will need to have a strong credit history in order to be approved.
Yes, you can certainly make a joint application for car finance in the UK. When applying for car finance, you will likely be asked to provide information about your income and your credit history. If you are applying with a partner, you can both provide this information jointly. This will help to show that you are both responsible borrowers and that you can afford to repay the loan.
When considering a joint application for car finance, it is important to remember that both borrowers are equally responsible for the loan. If one borrower fails to make payments, the other will be responsible for making them. This could potentially lead to negative consequences for the credit history of both borrowers.
It is also important to consider how a joint car loan will affect your finances overall. If you are already borrowing money together, adding another loan may put a strain on your budget. Make sure that you are comfortable with the monthly payments before applying for car finance as a couple.
No, you cannot finance a car for someone else in the UK. The process of buying and financing a car in the UK is relatively complex, and it can be difficult to do so if you are not the registered owner of the vehicle. Additionally, most lenders will require that the person taking out the loan be the primary driver and primary user of the car. You can, however, be listed as a guarantor.
If you have been refused car finance before, it is important to understand why this was the case. There could be a number of reasons, such as a poor credit history or a lack of affordability.
If you have been refused car finance in the past, you may want to consider speaking to a specialist car finance broker who can help you identify the best finance option for your needs.
💡 Want more information? Check out our guide on reasons why car finance gets refused.
Bad credit is a term used to describe a credit rating that is below what is considered to be good (this can vary, but it’s typically below 500). This rating can make it difficult for people to borrow money, get approved for credit cards, or take out loans.
Initial eligibility checks may involve Monevo and/or the lenders completing a soft search of your credit report. This does not impact your credit score at this stage. The lenders will subsequently conduct a hard search prior to finalising your offer should you choose to proceed. The hard search will show on your report for 12 months.
Unfortunately, it is quite difficult to get car finance with bad credit in the UK, but it’s not impossible. This is because most lenders will see this as a sign that you are not good at managing your finances and are therefore a high-risk borrower.
There are a few lenders who do offer car finance to those with bad credit, but the interest rates and fees tend to be quite high. If you are looking for car finance and have bad credit, your best bet is to search for a specialist lender or broker who can help you find the best deal possible.
A CCJ (county court judgement) is a record of money you owe that’s been registered with the courts. It can make it difficult to get credit, including car finance.
Some lenders may be happy to go ahead with CCJ car finance, but the interest rates and terms may be less favourable than if you didn’t have a CCJ.
💡 Want more information? Check out our guide which covers “can you get car finance with a CCJ?” in greater detail.
An IVA is a formal insolvency agreement which can be used to repay debts over a fixed period of time. It is an agreement between you and your creditors which means that you can make affordable monthly payments and avoid bankruptcy.
It is possible to get IVA car finance, but it is important to speak to your insolvency practitioner beforehand to check that this is the right option for you. The main thing to remember is that you will need to be able to afford the monthly payments, so make sure that you factor these into your budget.
If you’re looking for a car loan while you’re on a debt management plan (DMP), it’s likely that you’ll find it difficult to get the finance you need. This is because lenders usually see people who are on DMPs as being a greater risk, as they may not be able to keep up with their repayments.
However, it’s not impossible to get car finance while on a DMP – there are some lenders who may be willing to work with you. It’s important that you approach a number of lenders to see who will offer you the best deal, and make sure that you can afford the monthly repayments.
It’s also important to remember that if your car is repossessed while you’re on a DMP, your creditors may increase your monthly payment amount or demand that you leave the DMP altogether.
If you have been made bankrupt recently, getting car finance can be tricky. This is because a bankruptcy will show up on your credit file, and most lenders will not lend money to someone who has been going through bankruptcy. However, there are some lenders who will consider lending money to someone who has been made bankrupt, so it is worth speaking to a few different lenders to see if they will offer you a loan.
In the UK, it is possible to get car finance with a provisional licence. Just remember that you’ll need to provide photo identification, so make sure you have an alternative to a driving licence ready.
A default on your credit file can make it difficult to get approved for car finance. However, it’s not impossible – there are lenders who will consider borrowers with defaults on their file. It’s important to shop around and compare quotes to find the best deal for you.
If you have been refused car finance before, it’s worth shopping around and comparing different deals. Car dealers may offer different interest rates and repayment terms, and some may even offer specific finance deals for those who have been refused in the past.
More times than not, a car finance application gets refused due to bad credit. If you continue to get refused, you may want to consider a guarantor loan. This type of loan requires a guarantor who agrees to repay the loan if you are unable to. This could be a friend or family member who trusts you to repay the loan.
If you’re buying a car on finance, it’s important to be aware of how it will affect your credit score. A car loan is a form of borrowing, and will be recorded on your credit file. This means that it will be taken into account when lenders are considering whether to give you a loan or mortgage in the future.
A car loan can help you build your credit score if you make regular repayments on time. This is because it shows that you’re able to borrow money and repay it in a timely manner. However, if you miss repayments or default on the loan, this could damage your credit score. So, it’s important to be sure that you can afford the payments before taking out a car loan.
There are a few ways that you can increase your credit score. One way is to make sure that you always pay your bills on time. You should also try to keep your credit utilisation low, meaning that you shouldn’t use all of your available credit at once. You can also try to build up your credit history by opening new credit accounts and using them responsibly. Finally, you can get a copy of your credit report and make sure that there are no errors on it. If there are, you can dispute them with the credit bureau.
Credit scores are important when financing a purchase because they are one factor that lenders look at when considering a loan. A high credit score means you’re a low-risk borrower and could be eligible for a lower interest rate on a loan. This could save you money in the long run. A low credit score, on the other hand, could lead to a higher interest rate and could end up costing you more money.
A soft credit search is a type of credit check that doesn’t affect your credit score. It’s often used by potential lenders to get an idea of whether you’re likely to be approved for a loan before they do a hard credit search, which does affect your credit score.
There are a few ways that you can find out if you are eligible for car finance. The easiest way is to use an online car finance calculator. This will give you an idea of how much you could borrow and what your monthly repayments would be.
You can also speak to a car finance broker who can help you find the best deal for you. They will be able to tell you if you are eligible for car finance and also help you to find the best loan for your needs.
The amount you can borrow will entirely depend on your application and what is found through your soft credit search. For better insights, we recommend using a car finance calculator to get a better understanding of how much you can borrow.
Almost instantly! Simply fill out the application form and the broker will provide you with a list of lenders.
You’ll have quotes from a list of great lenders, meaning you’ll always be shown fantastic deals for your requirements.
Pre-approved for car finance means that a lending institution has already assessed your creditworthiness and has approved you for a loan up to a certain amount. This can be helpful in speeding up the car-buying process, as you will know beforehand how much you are able to borrow. It is also a good indication that you are likely to be approved for a loan if you apply.
Simply fill out the short application form and then choose from the list of trusted lenders presented to you. You’ll then be on the road to getting cheap car finance deals. The finance could be with you within the same day, subject to lender approval and requirements.
Most car finance lenders will offer a ‘cooling off’ period, meaning you can cancel your agreement without any penalties during this time. This will entirely depend on your specific loan, however, so always remember to read the small print.
The choice is entirely up to you! While new cars will offer better features and last longer, used cars are often cheaper to finance.
If you buy a car with outstanding finance, the car will belong to the finance company until the debt is paid off. As the owner, you will be responsible for the debt. You may not be able to sell or trade in the car until the debt is paid off, and you may be responsible for any damage to the car.
APR stands for Annual Percentage Rate. You’ll see APR mentioned a lot in the world of car finance – it represents the annual cost of borrowing money, covering factors like admin fees, interest rates, arrangement charges, and so on. You’ll be offered a specific APR based on your application.
The legal owner of a car on finance is the lender. This is because the car is seen as security for the loan, and the lender has a legal interest in it until the debt is repaid in full. The person paying the finance is the registered keeper.
Yes, you can get car finance for a private car sale. The process is similar to getting car finance for a new or used car from a dealership. You will need to provide information about your income and credit history to the lender, and they will assess your eligibility for a loan.
There are a number of lenders who offer car finance for private sales, so it’s worth shopping around to find the best deal. Be sure to read the terms and conditions carefully, as some lenders may have stricter eligibility criteria than others.
Yes, you can get car finance for a new car through Car Finance Saver.
You will need personal details such as employment status, monthly income and information about the vehicle you wish to buy in order to complete the online application. The information provided will determine the list of lenders that may be able to offer you finance. These documents may vary depending on the lender, but typically you will need to provide:
It is completely free to find quotes through Car Finance Saver. Any payments associated with your car finance deal will be dealt with through your lender. Upon agreement, they will send you all the necessary information for secure payments.
A balloon payment in car finance is a large, one-time payment that is made at the end of the loan term. This payment is significantly larger than the other payments made during the loan term, and it is used to pay off the remaining balance on the car.
💡 Want more information? Check out our guide on how balloon payments work when car financing.
If you’re unable to make your monthly car repayments, your car may be repossessed. This means the lender can take back the car if you don’t make your payments.
Yes, you can repay your car loan early. However, you may be charged a prepayment penalty if you repay your loan before the end of the loan term. Contact your lender to learn more about their early repayment policies.
To end your current finance agreement, you will need to contact the finance company directly and inform them that you would like to terminate the agreement. The finance company may ask you to provide written notice of your intention to terminate, or they may ask you to sign a termination form. Either way, it is important that you communicate with the finance company in order to ensure that the termination process goes smoothly. You will likely have to pay a termination fee.
In order to sell your car while it’s on finance, you will need to end the agreement with your lender. This is because they are still the legal owner of the car while the finance deal is in place. You will likely have to pay a settlement figure.
When you buy a car on finance, the car itself is the security for the loan. This means that the finance company technically owns the car until you’ve paid off the loan. If you want to part-exchange your car for a new one, the finance company will have to agree to it. Any proceeds made from giving in your old car can be put towards the new purchase.
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Car Finance Saver is an Introducer Appointed Representative of Quint Group Limited. We’ve partnered with Monevo who can provide you with access to dozens of lenders with tailored and competitive finance deals. Our website is completely free to use but we may receive a fee or commission from our Partners for introductions. Any fee or commission will not be added to your credit advance. See how we work here. *The Trans Union may conduct a soft search as part of the application process; however, this will not affect your credit score and will not be visible to lenders.
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