Found the car of your dreams? Unfortunately, financing it can be a nightmare. That’s why we’ve created this guide which explains the various car finance options available to you, and the differences between them. Have you thought about buying the car with a personal loan? You can borrow up to £25,000 without a guarantor and receive same day funding (if approved) when applying through Personal Loans Now. Apply now and you could own that dream car today!
Did you know?
A personal loan from a private lender could be cheaper and less risky
than finding car finance deals from dedicated car finance companies.
Give us a chance to get you a better deal.
So, you want to buy a car? How are you going to pay for it? When you start looking into the world of car finance, you’ll discover that there are several different options. You may hear about PCPs, HPs and even PCHs, while others are suggesting personal loans or even 0% credit cards. These are all viable options, but there are significant differences.
Can you afford an initial deposit? How much can you repay each month? Do you want to own the car outright from the start, or are you happy to go with secured car loans, where the car isn’t yours until the end of the agreement? In the table below, we’ve summarised the main features of three main options: personal loans, personal contract purchases and hire purchases. We’ve also included a list of definitions later on, to help you truly understand your options.
|Personal Loan||Personal Contract Purchase||Hire Purchase|
|Usually requires an initial deposit|
|Fixed monthly repayments|
|Final balloon payment (optional)|
|Immediately own the car outright|
|Secured against the car|
|Own the car at the end|
|Excess mileage charges|
|Find out more about personal loans||Find out more about PCP||Find out more about HP|
Car Finance Calculator
There are many car finance deals available on the market, and taking the time to make some comparisons can end up saving you very large sums of money. You can sometimes find 0 car finance deals, where you pay 0% interest on the loan, but in most cases, you will have to pay interest and other charges.
One of the best ways to do a car loan comparison is through using a car finance calculator. You put in some details about how much you want to borrow and how long for, and the car loan calculator will product the repayment terms. This makes it a great way of identifying cheap car finance deals. When checking out car finance companies, remember to ensure that they are FCA-authorised.
Apply for a Car Loan with Personal Loans Now
You can apply if you
- Are aged 18 or over
- Are a UK resident
- Have a UK bank account
- Have a steady source of income (this can be benefits)
Due to our unique position as an Introducer to Quint, we can offer access to a wide range of lenders specialising in different circumstances. This means that you can apply with us even if you have a bad credit history, are self-employed or unemployed, and whether or not you have a guarantor.
To speed up the application process, have the following details to hand:
- Amount of money you need to borrow
- Last 2 years address history
- Employment details
- Monthly income and expenses
- Your bank details
Ready? Click here to begin your application.
Bad Credit Car Finance
If you have bad credit, finding car finance at a reasonable rate tends to be much harder, as lenders will consider you to be high risk. However, rather than turning to illegal options such as no credit check car finance, look for lenders who specialise in car loans for people with bad credit.
Try not to apply to every lender you find in the hope that one will accept you, as every search leaves a mark on your credit file. Instead, check the criteria carefully and try to apply for a car finance for bad credit with an instant decision, so you’ll know immediately if you’ve been accepted.
If you have a deposit, this may increase your chances of approval. However, at Personal Loans Now you can apply for bad credit car finance with no deposit, and we’ll give you an instant decision with same day funding, if approved. All set to buy that car today!
If you’ve never tried to find car finance before, the different terms used may confuse you. We’ve put together a handy list of definitions to help you understand what different lenders offer and find the best car loan for your situation.
- Personal Contract Purchase (PCP) – You pay a deposit and then monthly instalments. At the end of the agreement, you can either pay a balloon payment and keep the car, or just hand it back.
- Hire Purchase (HP) – You pay an initial deposit and then monthly instalments. At the end of the agreement, the car belongs to you.
- Personal Contract Hire (PCH) – You pay a deposit followed by low monthly instalments, and return the car at the end of the agreement.
- Balloon payment – This is the large payment that you pay at the end of a PCP in order to own the car
- Excess mileage charges – A mileage limit is usually set at the beginning of the agreement. If you go over the limit, you can face hefty charges.
- Depreciation – This refers to the car losing value during the time that you have it, due to factors such as age and mileage. Read more about depreciation on MoneyAdviceService.org.uk.
Thinking about getting a car? Read these blogposts first.
Car Finance: A Conclusion
As with all credit commitments, applying for car finance is a serious matter. think carefully about what type of car finance is best for your situation, and take your time over finding the best deal from an FCA-authorised lender.
At Personal Loans Now, we want to help you buy the car you want today. You can apply for a loan of up to £25,000, with or without a guarantor. This will enable you to buy the car outright without an initial deposit, and you can set the loan term to make the monthly repayments affordable. All our loans come from FCA-authorised lenders in the UK, some of whom specialise in lending to bad credit applicants. Apply now for an instant decision with same day funding, if approved.
That car could be yours today!