Car finance

Yes, you should be able to, although it depends on your own personal circumstances. Car finance isn’t just for new cars. Many people choose to finance buying a used car in the same way as they would a new one. We can search and compare hire purchase and personal loans for buying a used car.

With HP and PCP, the finance company could take the car back and use the proceeds to repay your debt.

With a personal loan or credit card, the lender will expect you to repay whatever you still owe. But you wouldn’t be under any obligation to sell your car.

As for a Personal Contract Hire, if you can’t keep up with your payments, you may be forced to pay penalty fees and may also have the car taken away from you.

Not necessarily. As long as you have your budget in mind, we can search and compare between our panel of lenders to find the right option to fund the car you go on to buy. However, for hire purchase loans you will need the vehicle’s registration number to complete the application (this doesn’t apply to personal loans).

No, there are no fees or costs when you compare car finance and car loan options with us. Instead, we 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, we will show this to you.

It depends on which kind of car finance option you’re looking at. A hire purchase car loan usually requires a deposit, with the amount varying depending on the provider and the amount you’re borrowing. If you do need a deposit, increasing your deposit amount should reduce your monthly repayments.

If you choose a personal loan instead, you won’t need to worry about a deposit at all. As long as you can afford to keep up with the monthly repayments, this could get you on the road without having to save up for one.

Possibly, but it depends on your specific loan agreement. Most loan and car finance providers will include early repayment charges in your agreement, so you need to check these before you decide. The fees vary between providers.

If you’re able to make overpayments each month or pay off the whole amount early, this can be a great option as you’ll no longer be paying the interest each month. Just make sure that it makes sense to you financially once you’ve taken any early repayment fees into account.

No, it’s illegal to knowingly sell a car with outstanding 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.

Your initial comparison will let you see whether you’re eligible for finance, without impacting your credit score. This is because you’ll only face a ‘soft search’ when comparing. A more in-depth hard credit check is only carried out once you decide to officially apply for the loan. Comparing loans with Compare the Market won’t require a hard credit check. Our comparison service only leaves a soft search, which isn’t visible to lenders and won’t affect your credit score in any way.

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. Compare the Market will never carry out a hard credit search when you compare loans with us.

Once you’ve compared and decide to then go with a particular provider and buy a product, then they’ll carry out a ‘hard search’, which will leave a mark on your credit record, and may impact your score.

If you don’t think a dedicated car finance plan is right for you, here are some alternatives:

Secured loans
If you need to borrow larger amounts, perhaps for a high-end model or you’ve had trouble being accepted for a personal loan in the past, a secured loan could boost your chances of getting the money you need for the car.

However, secured loans come with extra strings attached. To get one, you have to offer something valuable as collateral. A common example would be your home. This means that the loan provider owns the car until you’ve paid it off. The collateral is used to reassure the lender that their investment in you is less risky, because they’ll be able to repossess the collateral if you’re unable to keep up with your repayments.

You should be very careful when taking out a secured loan, as you could lose the collateral you used to get the loan. However, because of this, secured loans tend to offer higher borrowing amounts, lower interest rates and longer loan terms, which could help make the repayments more manageable.

Credit cards
For a purchase as expensive as a car, you should only use a credit card if you have very few options and you probably won’t be able to buy a very expensive model. However, a 0% purchase credit card could be a useful alternative to car finance if you can pay it off quick enough.

Because you won’t be paying any interest, this could be an attractive alternative to a more traditional loan or finance agreement, but you’ll normally have to pay this off much sooner, to keep that 0% rate. You should also watch out for any agreed limits to your card, both for the 0% period, as well as the borrowing limit you can reach. If you break either of these limits, you’ll probably lose your 0% rate and you could suddenly find yourself being charged a significant amount in interest.