Used car finance

Spread the cost of a second-hand car with a PCP or HP used car finance agreement

BuyaCar team
Feb 16, 2017

In the past you needed to buy a new car to get the lowest finance rates, subsidised by manufacturers.

But years of low interest rates and a competitive marketplace have cut the cost of used car finance. More than a million used vehicles a year are now bought on finance, according to the Finance and Leasing Association, which represents lenders.

Search for used car PCP deals

Interest rates are as low as 6.9% APR on a range of finance types, which give you plenty of options. You can usually choose whether to leave a deposit or not, pick the length of agreement that suits you, and lower your monthly payments by deferring some of the cost to the end of your deal.


Apply for used car finance

You’ll get the most accurate finance quote if you apply once you’ve chosen a car: your monthly payments will depend on its price, and may also be based on its predicted value at the end of the agreement.

The market for car finance is competitive and it usually takes just a few minutes to get a finance quote; BuyaCar works with a panel of lenders to provide low-rate finance for a range of circumstances. You can apply for a no-obligation quote online, call on 0800 050 2333 or send us a message.

Find used cars for less than £200 a month

Once accepted for finance, it’s normally straightforward to transfer the agreement onto another car without having to go through the application process again - as long as your monthly payments remain affordable.

Just as with new car finance, the better your credit score, the more likely you are to be accepted with the offer of a low interest rate. Being on the electoral roll and having a track record of paying debts (such as credit card bills) on time, will help.

Michael Luhrenberg/


Used car finance vs new car finance

One major difference between new and used car finance is that manufacturer incentives are rarely available for used cars. This means that 0% interest deals and large deposit contributions aren’t normally offered on used models.

It’s also less common to lease used cars on a personal contract hire (PCH) agreement.


Types of used car finance

PCP used car finance

PCP offers low monthly payments and flexibility at the end of the agreement: you can either hand back the car, trade it in for a different model or keep it by paying a lump sum or refinancing. is available on used cars that are less than four years old.

Once cars are older than this, it gets more difficult to predict their value at the end of the finance agreement, which means that your monthly payments cannot be calculated accurately.
See our guide to PCP finance.


Hire Purchase used car finance

You can buy just about any used car with Hire Purchase finance, which spreads the cost of a vehicle over a series of monthly payments.

Because you own the car at the end of the agreement, its future value matters much less to the finance company.

Unlike most other forms of car finance, your monthly payments cover the full cost of the car - minus any deposit. This makes them more expensive, but means that you’re left with a car at the end of the agreement, with no further money to pay.
See our guide to Hire Purchase finance.


Lease Purchase used car finance

Typically used for commercial vehicles such as vans, but also available for used cars, lease purchase finance will usually result in the lowest monthly payments of all. This is because the payments only cover part of the car’s cost. At the end, you’re left owing the finance company the finance company a lump sum, which is calculated to be the value of the car at the end of the agreement.

You’ll either have to pay the money from savings or refinance the vehicle. It’s often possible to come to an agreement with the finance company which will allow you to sell or part-exchange the car in order to raise funds to pay your debt.
See our guide to Lease Purchase finance.



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