Car finance
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Rates from 9.9% APR. Representative APR 15.85%. Car Finance 247 is a credit broker, not a lender, and will show you products offered by lenders. To apply you must be a UK resident aged 18 or over. Credit is subject to status and eligibility.
Find the right deal for you from Car Finance 247’s trusted lenders, including
How does car finance work?
Car finance helps people buy a car that they couldn’t normally pay for up front. You’ll typically pay a deposit, followed by monthly repayments (with interest) over a fixed term. This could be from two years up to five years. The term length you choose will affect your monthly repayment amount. A longer term usually means lower repayments, but it could cost you more in the long run as you’ll be paying more interest overall.
We’ve partnered with Car Finance 247, a leading car finance broker, to help you find the right deal for your circumstances from their wide panel of lenders. You’ll get a decision in minutes and be paired with a dedicated account manager, who will be on hand to help you through your car buying journey.
Why apply for car finance through Compare the Market?
- Search for the right deal for your credit circumstances from a wide panel of lenders
- Choose from a range of products including hire purchase, personal contract purchase and personal loans
- Car Finance 247 considers all credit histories: your credit score won’t be impacted when you apply
About CarFinance 247 Limited (Car Finance 247)
CarFinance 247 Limited (Car Finance 247) is one of the UK’s leading car finance brokers uniting buyers, car dealers and finance providers. Car Finance 247 acts as a credit broker, not a lender, which means it will show you and distribute products offered by lenders. Advice is provided by Car Finance 247, who are authorised and regulated by the Financial Conduct Authority (653019).
Car Finance 247 is not part of Compare the Market Limited. Compare the Market receives a % of the commission that our partner Car Finance 247 earns. All applications are subject to lending and eligibility criteria.
Car Finance 247 will not charge you a broker fee should you decide to proceed with a car finance product.
What types of car finance are there?
There are several different types of car finance available, with different eligibility criteria, that are designed to suit different needs and circumstances.
Hire Purchase (HP)
With this type of car financing, your loan will be secured against the car and repayments split monthly. Once you’ve made the last repayment, the car will be yours to keep.
Pros
- You’ll own the car at the end of the loan term
- There are no mileage restrictions
- The lender is responsible for making sure the car is functional and works as advertised at point of sale
Cons
- Monthly repayments can be higher than other loan options
- You can’t sell or modify the car during the loan term
- You won’t own the car until you’ve made all the repayments
- You may need a good credit score to qualify
Personal Contract Purchase (PCP)
This type of agreement is based on borrowing to repay the estimated amount of value the car will lose during the loan term (its depreciation) rather than its purchase price. At the end of the agreement, you can hand the car back, buy it by paying a one-off balloon payment, or use any positive equity as a deposit in a new loan.
Pros
- Monthly repayments can be lower than other loan options
- You have options at the end of the agreement and can hand the car back
- The lender is responsible for making sure the car is functional and works as advertised at point of sale
Cons
- You won’t own the car unless you pay the one-off balloon payment at the end of the loan term
- A mileage limit might apply with extra charges if you go over the agreed amount
- You may need a good credit score to qualify
Personal Loans
With a personal loan, you’ll borrow the full or part value of the car and use the funds to buy and own it straightaway. You’ll then repay the loan in monthly repayments over a fixed period.
Pros
- You’ll own the car as soon as you pay the dealer
- There are no mileage restrictions
- You can modify or sell the car during your loan term
- Interest rates are typically lower than other types of car finance, but may also be higher depending on your credit score
Cons
- Monthly repayments are typically higher as people often finance a significant portion of the vehicle price
- You are responsible for making sure the car is functional and works as advertised at point of sale
- You may require an excellent or good credit score to qualify
Further options, which are not currently available through Compare the Market, include:
- Personal Contract Hire (PCH) – pay a monthly fee to rent the car for two to three years, then return it at the end of the agreement period.
- Logbook loans – a type of secured loan that uses the car as collateral.
How much does car finance cost?
It’s hard to say exactly how much car finance loans cost as there are many different factors that can affect the total amount payable. If you’re looking for cheap car financing, here’s what will influence the cost:
- The amount you’re borrowing – simply put, the more you borrow, the more you’ll pay back.
- The APR – the higher the APR, the more you’ll pay in interest. The APR you receive will depend on your individual circumstances, credit score, and the lender that approves you. Check the representative APR advertised, but keep in mind that this may not be the APR you receive. At least 51% of applicants will get this APR or lower.
- The loan term – the longer the loan term, the more you’ll pay back in interest. The best way to lower the total cost of your car finance is to pay off your loan in the shortest time you can afford.
- Your credit score and history – if you have a bad credit score, you probably won’t qualify for the lowest interest rates. This could mean you’ll pay more in interest, increasing the overall cost of the loan.
- Loan fees – also known as admin or arrangement fees. Check the terms and conditions of your agreements to find out whether these costs apply. These fees should also be included in the APR when comparing loan options.
Can I get car finance with bad credit?
If you’ve missed payments in the past, you might have a bad credit score. While poor credit can make it more difficult to find car finance, we can still help you compare car loans and finance packages to find the right fit for your financial situation. Our partner, Car Finance 247, works with a wide panel of lenders, including those who offer bad credit car loans.
If you haven’t had credit before and don’t have a credit history yet, we can also help you build your credit score.
Taking out car finance, or any other type of credit arrangement, could help you improve your credit score if you make all your repayments on time. Successfully managing a car loan demonstrates that you’re capable of being responsible with money.
Car Finance 247 will help you find the right deal for your circumstances and needs from it's wide panel of lenders.
What do I need to apply?
The documents you need to apply for car finance vary from lender to lender. But you’ll usually have to provide:
- Proof of address
- A photo or scan of your driving licence
- Your contact details and the car you want to buy.
To make sure you can afford the payments, the lender might also ask to see your payslips or bank statements.
Your Car Finance 247 account manager will be able to let you know exactly what is required and help process all the paperwork.
Once you’ve filled in your application, Car Finance 247 will search for an approval in principle (a statement of how much lenders are willing to offer) from their panel of lenders.
Apply nowFrequently Asked Questions
Do I need to know what car I want to buy?
No, you don’t need to know what car you want to buy before applying with Car Finance 247.
If you’re not sure what you want, and need help finding the right car for you, your account manager at Car Finance 247 could help. Have a chat with them and let them know what sort of car you’re looking for.
What is the cheapest way to finance a car?
The cheapest way to finance a car for you will depend on several things: the type of loan, the term length and the interest rate.
For example, one deal might offer a cheaper monthly repayment, but the loan term is two years longer. This means you’d likely pay more overall, because you’re paying more in interest.
PCP car finance could provide a cheap finance option. This is because you’re only borrowing the difference between the current price and the lender’s predicted future valuation – the Guaranteed Minimum Future Value (GMFV). However, with PCP finance, you won’t own the car at the end of your agreement. This is unless you pay the balloon payment, which, as the name implies, is much higher than your regular monthly payments.
Will I be charged a fee for organising car finance?
No, there are no fees or costs when you compare car finance and car loan options through Car Finance 247. Instead, they get a fee or commission from the lender for arranging your car finance with them. In some cases, car dealers or lenders may charge an administration fee. If this is the case, Car Finance 247 will show this to you.
What happens if I fall behind with payments?
With HP and PCP, the finance company could take the car back and use the proceeds to repay your debt.
With a personal loan, the lender will expect you to repay whatever you still owe. But you wouldn’t be under any obligation to sell your car.
What is a good deposit for a car?
A typical car deposit is usually 10% of the loan amount.
Generally speaking, the bigger the deposit you can afford, the cheaper your car finance will be. This is because you’re borrowing less and could be paying less interest on a shorter loan term.
However, a good deposit is simply that which you can afford comfortably. Make sure you don’t leave yourself short, because you’ll have other things to pay for with a new car. For example, car insurance, tax and more.
What is APR?
APR stands for annual percentage rate, and it tells you the cost of borrowing money for a year.
As well as the interest, APR also includes any additional fees. This can be useful to know when comparing different loan and finance deals.
Lenders will advertise a representative APR. This is what must be offered to at least 51% of customers. The APR you are offered will depend on several factors, including your credit score.
Is getting a car on finance worth it?
Yes, as long as you’re comfortable with the repayments, buying a car on finance can be a great way to pay for a car that you otherwise wouldn’t be able to afford. Buying a car outright can be expensive, so car finance deals help make buying a car more accessible.
However, buying a car on finance can be more expensive than buying outright. Unless you get a 0% finance deal, you’ll likely be paying interest over several years and there’s a cost to that. Make sure you’re fully aware of the costs involved and only commit if you’re confident you can pay the car off.
Can I repay my car loan early?
Yes, you can usually repay a car loan early.
To do this, you’ll need to pay the contract’s settlement figure. This is an agreed amount that will end your finance agreement with the lender.
The settlement figure will include the remaining balance outstanding but will exclude the interest you’d have paid on it. This could save you money overall, but look out for additional fees included in the settlement figure.
You should be able to find your settlement figure in your contract. If you’re not sure, it’s best to contact the lender and request a settlement figure from them.
Will applying for car finance affect my credit score?
When you apply for car finance with a lender, they’ll run a hard credit check on you. This is recorded on your credit report and may impact your credit score.
When you’re first applying with Car Finance 247, they’ll run a soft credit check on you. This shouldn’t affect your credit score. A soft credit check is used to match you with lenders from their panel that are likely to approve you for car finance.
Once you’ve submitted a formal application to a lender, the hard credit check is carried out.
What is a soft search?
A soft search is a type of credit check that doesn’t affect your credit score. When comparing quotes for money products or insurance, providers will do a soft search, which is used to check your details are accurate. This will only appear on your credit file to you and won’t impact your score. Car Finance 247 will never carry out a hard credit search without the customer’s prior consent. Simply applying to get a finance quote does not impact your credit score.
Do I need a deposit?
Whether or not you need a deposit depends on your lender.
Most lenders available through Car Finance 247 don’t require a deposit. However, if you can afford it, paying a deposit or part-exchanging will reduce the cost of your loan and your monthly repayments.
Who is eligible for a car loan?
To apply for a car loan with Car Finance 247, you must be over 18 years old and have a minimum of three years’ address history in the UK.
How quickly can I get a car loan?
When comparing car loans with Car Finance 247, you can get a decision in minutes.
Simply fill out the online application and they’ll quickly assess your eligibility. Once you’ve been approved in principle, one of their dedicated account managers will call you to through your details and discuss the next steps.
Can I get finance for a used car?
Yes, getting a used car on finance is very similar to buying a new car on finance.
Car Finance 247 can help you search and compare different finance options for buying a used car.
I have a part exchange, can I trade this in?
Yes, Car Finance 247 can accept part-exchanges.
You can use a part-exchange as a deposit towards a new car. Depending on how much your part-exchange is worth, it could reduce your total loan amount. This could mean you’re paying less each month.
Can I buy my car from any dealer?
Yes, you can buy a car from any UK dealership.
To help you get started, our partners at Car Finance 247 have more than 100,000 cars available to view. Once you’ve found the car you want, just let your account manager know and they’ll make the arrangements.
Can I sell a car on finance?
No, it’s illegal to knowingly sell a car with outstanding finance still on it.
You can sell a car you’ve bought with a personal loan but not one you’ve bought with outstanding HP or PCP finance still on it. Simply put – the car isn’t yours to sell. You can only sell the car once your finance contract comes to an end, or if you settle the outstanding finance first.
It might be possible to part-exchange your financed car with another one, but this could be a costly option. Usually, the dealer will ask for a settlement figure from your finance company and this will be deducted from the value of the car you’re part-exchanging. If you were in the early stages of your finance agreement and your car has depreciated, you could end up owing far more than your new car is worth.
The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.