How to get car finance

Pay for your car in a series of affordable monthly instalments. The quick guide on how to get car finance

BuyaCar team
Nov 20, 2018

By removing the need to pay for your car upfront, finance can help you to get a car that you really want, in a good condition, for affordable monthly payments.

Most new car buyers use finance and it’s increasingly popular for used car purchases, according to the Finance and Leasing Association - the trade body - which said that over 1.4 million used vehicles were bought on finance in the 12 months to August 2018.

There are currently 701 cars available from under £100 per month on finance from BuyaCar, and 19997 that start at under £200 per month.

You can apply for finance online from BuyaCar in minutes. Quotes can be transferred between cars, if you decide to change your mind, and you can also use the finance to buy a car elsewhere.

It’s easy to compare rates with other finance providers, so you can be sure of getting the best deal available.

Using finance normally means that you pay more in the long run than buying outright in cash, because of the interest charges and fees that are added on to finance repayments.

How to get car finance - in three steps

Choose Car and Budget

You know the earnest advice: work out how much you want to spend and then find a product that meets your needs and budget.

That’s all very well if you’re looking for a toaster but buying a car can be more emotional: who wouldn’t stretch their budget slightly if it means getting the ideal colour, more modern gadgets or extra passenger space?

So, with a rough idea of the amount that you want to spend, there’s plenty of help to find the right car for you.

When you have a good idea of what you’re looking for, you can search all vehicles available from BuyaCar, narrowing down your search based on factors such as price, fuel economy and number of seats.

Every car displays a representative finance price, based on an interest rate that’s available to at least 51 per cent of buyers.

You can adjust the finance calculator, below the detailed description of every car, to suit your situation and provide a more accurate quote.

If you find your ideal car elsewhere, then you can still choose to finance your car with BuyaCar or another finance provider - there’s no obligation to use finance from a particular dealership.

 

Decide on the right type of finance

Hire Purchase finance (or Conditional Sale) enables you to buy your car and spread the cost over a series of monthly payments - plus the deposit.

But if you’re not sure you want to keep the car for more than a few years, the Personal Contract Purchase (PCP) means that you don’t have to pay for it upfront.

Your monthly payments are lower because they only cover the amount that the car is expected to lose during the agreement.

A the end, you can return the car and get a different one or buy it for the remainder of the cost. See our full guide to buying a car on finance for more details

 

Apply for finance

If you’re happy with the car and the finance offer, then you can put in your finance application.

You’ll then get a personally tailored quote, with an interest rate that’s based on your personal circumstances. As a result, this can vary from the "representative example", which is the interest rate that at least 51 per cent of people who are accepted for that finance product will pay.

You can apply online in minutes. Most applicants can also complete ID verification checks online too.

 

Comparing finance

It can pay to compare finance quotes, particularly if you’re buying a used car from a dealership, where the rates offered aren’t always the most competitive available.

There are plenty of online brokers, including BuyaCar, who can arrange finance for a car that is bought elsewhere, at competitive rates.

The key figures to look at are the APR, or annual percentage rate, which includes the cost of interest and additional fees. The higher the number, the more you’ll pay on top of the price of the car.

Finance quotes should also include the total amount payable under the agreement, which makes it clear how much finance will cost you overall. This is useful when comparing a deal that offers a large discount, compared with another that brings a lower interest rate, for example.

Bear in mind that PCP quotes include the final amount under the total cost payable: you may decide not to keep the car at the end, so you won’t pay that full amount.

 

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