Car finance
Car finance
Car finance
Car finance calculator
FAQ
Find a car
Company
General
Complaints
WhatsApp/Phone
Used car
finance guide
- No deposit needed
- PCP and HP from 9.9% APR
- Free car history and dealer check
My monthly budget
Used car financing provides a practical way to purchase a pre-owned vehicle through structured monthly payments instead of a large upfront cost. Data shows that 55% of used car buyers use financing options, with terms typically ranging from 3 to 7 years through banks, credit unions, and dealerships.
Calculate your car finance
Must be between £100 to £10,000 and difference between borrow and deposit must be £5,000
These estimates are subject to credit checks and may change when you apply for finance. this is for example purposes only
Hire Purchase (HP)
APR 14.9%60 monthly payments of
£0
- Interest rate
- 14.9% APR
- Amount of interest
- £0
- Total payment
- £0
Personal Contract Purchase (PCP)
APR 14.9%60 monthly payments of
£0
- Optional final payment
- £0
- Interest rate
- 14.9% APR
- Amount of interest
- £0
- Total payment
- £0
Rates from 9.9% APR. Representative 19.9% APR. Hire Purchase (HP) Example: Borrow £10,000 over 5 years with a £0 deposit. Representative APR 19.9% fixed rate. Monthly payment: £255. Total cost of car finance: £5,329. Total amount repayable: £15,329. Car Finance+ is a credit broker not a lender.
What is used car finance?
Used car financing allows buyers to borrow money specifically for purchasing a pre-owned vehicle. The loan covers the car's purchase price while the buyer makes monthly payments over an agreed period. This arrangement makes vehicle ownership accessible to buyers across different financial situations.
Lenders look at several key factors when reviewing loan applications. Credit scores significantly impact loan terms, with scores above 680 typically qualifying for the best rates. The vehicle's age and condition also matter since they affect its value as collateral for the loan.
The application process requires specific documentation to verify the buyer's financial status. This includes proof of identity and address, income verification, and employment history. Lenders use this information to determine appropriate interest rates and payment terms.
How does used car finance work?
The financing process starts with loan pre-approval and credit checks. Smart buyers gather their financial documents and check their credit score first, which helps secure better terms and speeds up approval.
Most lenders process applications within 24-48 hours. Interest rates on used car loans typically range from 6% to 13%, varying based on the buyer's credit profile and the loan duration. Stronger credit profiles and shorter terms generally earn lower rates.
Down payments play a crucial role in loan structure. Most lenders require 10-20% down, which reduces monthly payments and often secures better interest rates. For a $20,000 vehicle, putting $4,000 down can lower monthly payments by $75-100.
Pros and cons of used car finance
Understanding the benefits and drawbacks helps buyers make informed decisions about used car financing. Each option offers distinct advantages while carrying certain responsibilities.
- Manageable monthly payments instead of one large payment
- Access to higher-quality vehicles than immediate cash allows
- Opportunity to improve credit through regular payments
- Flexible terms from 3 to 7 years
- Multiple financing options for different situations
Consider the trade-offs when financing a used car. Interest rates average 2-4% higher than new car loans, increasing total ownership cost. Longer payment terms might result in owing more than the car's value as it depreciates.
Types of used car finance
The market offers several financing approaches suited to different buyer needs. Each option has unique features affecting ownership and payment structure.
- Personal Contract Purchase: Lower monthly costs with final balloon payment option
- Hire Purchase: Full ownership after completing payments
- Personal Loan: Direct ownership with fixed monthly payments
- Lease Purchase: Combines leasing benefits with ownership path
Each type carries specific requirements. PCP needs 10% down payment with 3-4 year terms. Hire Purchase spans 1-5 years with 0-20% deposits. Personal loans offer more flexibility but may have higher rates.
How much does financing a used car gost?
Total financing costs depend on loan term, interest rate, and down payment size. Current market data shows typical used car loans range from $15,000 to $25,000, usually spread over 5-6 years.
Interest significantly affects overall expense. A $20,000 loan at 7.5% APR for 5 years results in roughly $4,000 in interest charges. Shorter terms usually offer lower rates but higher monthly payments, while longer terms reduce monthly costs but increase total interest.
Factor in additional ownership costs like insurance, averaging $1,200-1,800 yearly for used vehicles. Lenders require comprehensive coverage on financed cars. Remember to account for documentation fees, title transfer costs, and potential early payment charges.
Alisa Dan
Frequently Asked Questions
( 01 ) How long can I finance a used car?
Financing terms typically range from 36 to 84 months. Most lenders offer 60-72 month terms as standard, though some extend up to 85 months. Shorter terms usually secure better interest rates but have higher monthly payments.
( 02 ) What credit score do I need for used car financing?
A minimum credit score of 680 is typically needed for the best rates. However, many lenders work with lower scores, though interest rates may be higher. First-time buyers can access special programs with more flexible credit requirements.
( 03 ) How much down payment is required?
Most lenders require 10-20% of the vehicle's purchase price as down payment. On a $20,000 car, this means $2,000-4,000 down. Larger down payments often qualify you for better interest rates and lower monthly payments.
( 04 ) What are the typical interest rates for used car loans?
Interest rates generally range from 6% to 13%, depending on credit score and loan term. For example, a $20,000 loan at 7.5% APR for 60 months results in approximately $4,000 in total interest charges. Rates average 2-4% higher than new car loans.