Where Do I Start With Getting Car Finance?


Buying a car is likely to be one of the largest financial commitment you make – most likely second only to your home – so deciding how you’re going to finance it, and the best way to go about getting second-hand car finance sorted, is a serious task. But, it doesn’t have to be a stressful one. If you’re looking for second-hand car finance, there are a few options, and we’ve outlined them here below.

Option 1: Get a personal loan to buy a car

You can get a personal loan from a bank, building society or a company like us, and you’ll be able to spread the cost for up to around seven years. You can arrange a personal loan from some car dealers, but the usual route is to go directly to a bank or broker, as they’re likely to have more competitive repayment rates. We can help find a lender right for your situation – with just one simple application.

Another kind of loan you might consider is a secured loan, this tends to typically appeal to customers who have a bad credit rating, as they can be easier to get with poor credit as lenders have the security of your home that they can claim if you don’t meet your monthly repayments.

Option 2: Pay with hire purchase

With a hire purchase (often referred to as HP) you’ll typically (but not always) need a deposit of around 10%, and you make fixed monthly payments over an agreed period. You don’t officially own your car until the final payment has been made – whereas if you pay with a loan, the car is yours from the start. This is because with a hire purchase, the loan is secured against the car, meaning that if you fall short on your payments, you risk losing it.

Car dealerships usually offer hire purchase agreements, and they’re available from some brokers too. They should be authorised and regulated, meaning that you’re protected in law.

Always make sure the finance is done through a reputable finance company – ask the dealer who they use, and make sure you’re clear on what you’ll be paying monthly.

Option 3: Personal Contract Purchase

A Personal Contract Purchase (or PCP) allows you to drive away with a new car, usually after paying a deposit, and then signing up to a set amount of monthly payments.

What your monthly payments will be will depend on the cost of the car and whether you’re putting a deposit down (and how much). At the end of your agreement, you won’t own the car so you hand it back to the dealer so long as it’s in good condition – you might have to pay a fee if there’s damage. On the other hand, if you decide you’d like to own the car, you’ll be asked for a final payment. At this point, you can take out a personal loan [link to personal loans page] to pay for what’s left if you can’t afford to pay in cash.

Option 4: No deposit car finance

No-deposit car finance can put you behind the wheel of your new car without having to have saved a penny beforehand. Once you’ve got your car, you’ll typically have a month before having to start making your repayments. No deposit car finance has the big plus of helping you to get a car quickly without having to get any money together up front yourself – all you have to do is make sure you can afford the monthly ongoing repayments. This kind of finance is typically available with both Personal Contract Purchase (PCP) or Hire Purchase (HP) finance.