Car Finance Loans

If you are looking to buy a new car, it is important to compare car finance options, because it tends to work out a lot cheaper than applying through your local car dealership.

When you go to buy your dream car, a dealership usually charges a much higher premium, and the average motorist goes ahead with it, without considering all of their options – after all, you are sat in the seat and eager to buy your new vehicle. But, using specialist car finance instead could save you money and also give you greater flexibility with payment options.

Using a broker service means that you can be connected with the best car finance companies, and compare different options according to your needs, including making larger deposits, smaller monthly repayments or balloon payments. You can also choose whether you would prefer to own the vehicle outright at the end (Hire Purchase) or be able to trade it in for a new one in just a few years’ time (Personal Contract Purchase).

How To Apply For Car Finance With a Broker

Once you have found the perfect vehicle, it’s simple to apply for car finance with a broker service! In just three easy steps, you could be driving away in the car of your dreams.

Step 1

To get an initial quote, you simply need to let your broker know the cost of the car that you wish to buy – and whether you would prefer to make a deposit or part exchange.

Step 2

You will usually be presented with some different options and you can choose the car loan that best suits your needs.

Step 3

Once you have confirmed details with the car loans company, you can simply transfer this to purchase the vehicle of your choice. Simple!

What Are The Terms For Car Loans?

Rates can start from just 3% APR, subject to status, and customers can borrow over several years, with different payment options available. A broker will always take your preferences into account when they match you with the best car finance lender.

In terms of how much you can borrow, this will depend on your affordability and credit history. If you are part exchanging your vehicle, you can also add the value of this onto the overall total, freeing up more money to purchase your dream car.

What Are The Different Types Of Car Finance?

There are three main types of car finance – Personal Contract Purchase, Hire Purchase and a personal loan, which would require no deposit. Each of the options comes with its own benefits and limitations, so it’s important to carefully consider which is the best choice for you.

Personal Contract Purchase

Also known as PCP, this is the most popular type of car loan. With a PCP, you would pay an initial deposit and then monthly payments for a set period e.g 3 years, 5 years etc. The higher the deposit that you make, the lower your monthly payments will be, since you are essentially owning more of the car. The monthly repayments are typically lower than if you were to borrow other forms of car finance.

At the end of the loan term, you have the option to make a ‘balloon payment’ which covers the full cost of the vehicle and transfers ownership from the car finance company to you – meaning that you will own it outright. If you do not wish to keep the vehicle, you can give it back, or start a new PCP deal and get a new car (which is also very common).

Hire Purchase

With hire purchase, or HP, you will be paying a monthly fee to the finance company until you have fully paid for the vehicle and then you will own it outright. Here, you are paying to rent the car each month but eventually you will get to own it.

You will generally be required to pay a minimum deposit of 10% at the start and again, the higher the deposit you make, the lower your monthly repayments will be.

Car Loans With No Deposit

If you are looking for a car loan without a deposit, you can simply apply for a personal loan, which covers the whole cost of the car. This is where you take out a separate loan and just make monthly payments to cover the balance. With a personal loan, you will own the vehicle outright from the beginning, as you would use the money to purchase the vehicle at the start of the loan term. This is a type of unsecured loan and your eligibility will be based on your income and credit status.

Can My Car Get Repossessed If I Cannot Keep Up With Repayments?

There is a risk that your vehicle can be seized by the dealership if you cannot keep up with repayments. However, they will also take into account your deposit and any payments that you have made up to that point. Most dealers will try to avoid repossessing your car where possible.

You may have the option to switch to a different car finance deal that is better suited to your financial situation, if you’re unable to keep to the original agreement. It’s often a good idea to look at the terms and conditions of your car loan before you sign the agreement, to check what options are available should anything go wrong.

What Information Do I Need To Apply For Car Finance?

To get an instant quote from a broker service, you just need to enter the value of the car you wish to buy and your contact details, such as your name, age, phone number and email address.

Once you have been presented with the best car loan company based on your requirements, you will need to provide a copy of your driving license and proof of address. Depending on the provider, your application may be subject to a credit check.