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Car finance

Find the right car loan deal for you

  • Get a finance quote without affecting your credit score

  • Looking for a car? Choose from over 130,000 used cars from dealerships across the UK

  • Deals available from a panel of trusted lenders

Representative 19.9% APR.

We've partnered with CarFinance 247 to offer the best finance deals from their panel of lenders. CarFinance 247 is a credit broker not a lender.

Confused.com and CarFinance 247

We've partnered with CarFinance 247 to find you their best deal from a range of car finance lenders. Their service is free to use and getting a quote won't impact your credit score. A hard search only happens when you apply for a deal.

CarFinance 247 works with a panel of trusted lenders to offer you their best deals on car finance. Whether you're after PCP or HP they'll look to help you find a solution that fits your circumstances.

If you've already found your next car and just need the finance deal, they can help set it up for you. If you're still looking for your dream car, their car search gives you access to over 130,000 cars from across their trusted dealer network.

Once you’ve requested a quote, you will get a call from one of CarFinance 247’s account managers to discuss it in more detail. Alternatively, you can arrange to have them call you at a more convenient time.

CarFinance247 searches their panel of trusted lenders to present you with a quote over the phone with the best overall value. However, account managers will also discuss alternative options to fit your circumstances over the telephone.

CarFinance 247 customers rate them 4.8/5 on Trustpilot*.

*Correct as of November 2022

How does car finance work?

Simply put, car finance lets you spread the cost of buying a new car across regular monthly payments. There’s several different types of deals available which might be for you if:

  • You like the idea of changing to a new model every few years. PCP could be the option for you
  • You don’t quite have the funds to buy a car outright. Usually, HP or a loan can help you

You can use a car loan to borrow the money to buy your dream car in one lump sum. This way you’re spreading the cost of repayment over a number of years.

The deal types vary. The main options are that you borrow all of the money needed to buy the car, or you lease the car and choose to buy it outright at the end.

What are the different types of car finance?

We offer several types of car loan to suit different financial situations:

Hire Purchase (HP)

Hire purchase starts with a deposit to hire the car, usually around 10% of the car's value. After that you make monthly payments to the finance company until you've paid the car off in full.

Once you've made your final payment, you'll own the car.

Hire purchase deals usually lasts for 12 - 60 months and will often require a deposit at the start of the deal. Some deals have no limit on how many miles you can drive.

Hire Purchase information

Car loans

Car loans are also sometimes known as a personal loan or an unsecured loan. A car loan lets you borrow a one-off lump sum which is paid back in monthly instalments. This allows you to buy a car outright and spread the repayment cost over the course of a few years. With a car loan, you’ll own the car and there’ll be no limits on how many miles you can drive.

Car finance car loan payment explanation

Personal contract purchase (PCP)

Personal contract purchase (PCP) is similar to hire purchase. PCP deals usually last for 36 – 60 months. They usually start with a deposit followed by monthly repayments. PCP monthly payments are typically lower than hire purchase or a car loan. This is because you’ll be paying off the depreciation of the car, not its full value.

When your repayments come to an end, you’ll have a couple of options:

  • If you’d like to own the car, you’ll have to pay a ‘balloon payment’ which will cover the cost of owning the car outright
  • Return the car to the finance company
  • Exchange the car for a new car on a fresh deal
Personal contract purchase PCP car finance payment explanation

What type of car finance is best for me?

Trying to decide what type of finance to choose is something you should think over carefully. There are a number of things you’ll need to take into account such as:

  • How much can you afford to pay back every month?
  • How much do you want to borrow?
  • How long do you want the repayments to last for?
  • Are you able to put down a deposit?
  • What does your credit score and history look like?
  • The terms and conditions that come with each finance option
  • Which car model and make you want
  • Whether you’re looking to own the car outright or switch to a fresh deal on a new car?

Take a look at our table to compare the finance options:

Hire purchase Personal Contract Purchase Personal Loan
Requires initial deposit
Requires initial deposit
Usually requires deposit Usually requires deposit
You own the car outright
You own the car outright
Car is yours at the end of the agreement
Car is yours at the end of the agreement
You can choose to own the car with a 'balloon payment' You'll own the car at the start of the agreement whilst paying off the loan
Fixed monthly payments
Fixed monthly payments
Optional balloon (final) payment
Optional balloon (final) payment
Excess mileage charges
Excess mileage charges
Secure against an asset (eg car)
Secure against an asset (eg car)

Find the right car finance deal for you

Representative APR 19.9%

What affects the price of car loan payments?

The cost of a car loan will depend on what type of finance option you choose as well as a few other things about your loan, such as:

Length of the loan, also known as the loan term, will usually play a large role in the overall cost of your car loan. A general rule of thumb is the longer the loan, the smaller your monthly payments will be. Just remember that the longer you borrow for means the more interest you pay in the long run.

The interest rate, also known as the APR, is used to work out how much money is added to the cost of your car loan. The APR amount is decided in-part by your credit rating. Your monthly repayments cover paying back the loan and the added interest. If you’ve had a history of debt problems or your credit score isn’t quite up to scratch, you may have to pay a higher interest rate. Having trouble getting your head around APR? Give our representative APR vs exact APR guide a read.

Your credit rating could also play a part in how much your deal could cost. If you'd like to read more, our guide on how to improve your credit rating might be able to help.

What is APR?

APR stands for annual percentage rate and is the total amount you’ll have to pay back to the lender, including any additional fees and charges. It’s included in your monthly repayments.

When you get a car loan quote, you’ll see 2 types of APR - guaranteed APR and representative APR

Guaranteed APR means the rate you see, for example 8%, will be the rate you get. The total amount repayable won’t change when you get your loan as it’s based on your specific details and takes everything into account.

Representative APR means the rate you see won’t necessarily be the rate you pay. The lender will need more details from you before being able to give you an exact rate.

How much does a car loan cost?

It depends on how much you borrow and for how long a period you pay back your loan.

Depending on your budget you may want to make your monthly payments lower. You can do this by paying your loan back over a longer period. But the total loan cost would increase as you’re paying that APR amount over a longer time.

Or equally to pay less APR overall, you could increase your monthly payments to pay off the loan faster.

You may also have to pay additional fees if you wanted to retain ownership of car.

Representative example: Borrowing £6,500 over 60 months with a representative APR of 19.9%, an annual interest rate of 19.9% (fixed) and a deposit of £0. The amount payable would be £166.07 per month, with a total cost of credit of £3,464.37 and a total amount repayable of £9,964.37. This is representative of CarFinance 247 Limited customers.

Credit subject to status. Actual finance offered will be dependant on further assessment of your affordability.

For example, here's the breakdown for a hire purchase loan over 5 years:

Deposit
£0
Remaining loan value to be paid over 60 months
£6,500
APR rate
19.9%

With this rate, the loan would cost you:

Monthly cost of loan (including 19.9% APR)
£166.07
Total APR costs due across loan period
£3,464.37
Total cost of loan
£9,964.37

How much can I borrow?

Check what your monthly repayments are likely to be

What details do I need to request a quote for a car loan?

To make finding the right car finance deal for you a little easier, have the following information to hand:

  • Your occupation and monthly income
  • Your current UK address
  • How much you'd like to borrow
  • A contact phone number and email address

Can I apply for car finance with bad credit?

If your credit score and financial history could do with some improving, the good news is it’s still possible to get a car loan deal. However, you should expect to pay higher interest rates. Your credit score is considered by the lender and plays an important role when applying.

Having bad credit doesn’t mean you’re locked out of getting car finance, but it does mean the number of deals available to you are limited.

The representative APR for bad credit finance through CarFinance 247 is 29.9%.

What our car finance expert says

Getting a quote is a great way to get an idea of the finance deals available to you without affecting your credit rating. There's no hard check on your credit rating until you go on and apply for a deal. Once you've got your quote and you're ready to apply, you can schedule a call with an account manager to discuss the deal in more detail.
Matthew Harwood Car care expert signature

Matthew Harwood

Car finance expert

Need more help?

What is car finance?

Car finance is a credit agreement between you and a lender that enables you to buy a car.

There are a number of different car finance types including:

  • A personal loan
  • Lease
  • Hire purchase
  • Personal contract purchase (PCP)

If you don't have the cash to buy a car outright it's important to think about the right car finance option for you. Each option is different and only with a personal loan will you fully own your new car from the get go.

Can I get car finance?

The easiest way to get started is to fill out our form and get a quote.

Like most financial products, you’ll have to be over 18 to apply. Some lenders will have their own requirements so it’s best to get in contact with them if you have any questions before applying.

Can you buy second-hand cars on finance?

Yes. Once your finance deal has been approved in principle, you're free to choose your car, whether it's brand-new or second-hand.

What is the cheapest way to finance a car?

When looking for a deal, we'd recommend finding something that suits your financial situation best in terms of affordability. For example, taking out a car loan might suit your circumstances as you can spread the cost of repayment over a few years. Or you might find that a PCP deal suits your finances better and choose to go down that route.

Whichever product you choose, make sure to do your research first to find your best deal.

Can I repay my loan back early?

This will depend on the lender and the terms and conditions of your deal. Some lenders will allow you to make higher monthly repayments or allow you to pay back your loan in full, but you may be charged early repayment fees. If in doubt, it’s always best to speak to the lender first.

How much can I borrow?

The maximum amount you can borrow on a car finance deal is £36,000 or £50,000 with a personal loan. The amount you can personally borrow will depend on a few factors such as personal circumstances and your financial and credit history.

Am I eligible for car finance?

By getting a quote, it’s easy to see if you’re eligible for car finance within minutes. You just need to enter some basic information that allows lenders to carry out a soft credit search to see if they can offer you a good deal. This doesn’t affect your credit rating.

How quickly can I get a car loan?

It can take up to a couple of days for you to get approved for a car loan. How long it takes to be approved varies depending on the lender, the type of deal you’ve chosen and the type of car you want to buy.

What happens if I miss a monthly payment?

If you’re experiencing repayment difficulties, it’s always best to speak to your lender as soon as possible. They may be able to help in some way and offer you options on how to proceed. Missing repayments can have several negative effects. These include, harming your credit score, leaving a permanent mark on your credit history or you could get a County Court Judgement (CCJ) against you. You may also find it difficult to borrow in the future and any loans you do take out will likely be more expensive.

Are there any mileage restrictions

Typically, you’ll see mileage restrictions on PCP deals. This is where you and your lender will agree a maximum amount of miles over the course of your PCP agreement. Depending on the lender, if you go over this amount, there may be an excess charge you’ll have to pay. To avoid any penalties, it’s always best to allow yourself some breathing room in your mileage allowance.

What is a soft credit check?

When you get a quote for a car finance deal, for CarFinance 247 to see which of their lenders will make you an offer, a soft credit check is run. A soft credit check or soft search is a type of credit search that is a way of finding out how eligible you are for a loan, without leaving a mark on your credit report.

Can I part-exchange my car as a deposit?

Part exchanging your car is where your dealer agrees to take your old car as a deposit and reduce the purchase price (or monthly payments) of your new car.

You can still part exchange if you are buying your car online. Some online dealerships offer a part-exchange service where they will give you a valuation for your old car and take it away when your new car is delivered.

What is voluntary termination?

Once you’ve paid 50% of the amount payable, legally you have the right to voluntarily terminate (VT) your car finance agreement. Each finance company will have different terms and conditions. But providing you’ve kept up payments and paid a final agreed sum, you can give the car back and end your contract.

The car will have to be in a reasonable condition – if not, there may be some extra charges when you return it.

What’s the difference between representative and exact APR?

Representative APR is the figure lenders use to advertise the interest rates on their loans.

The representative APR should be representative of what the lender reasonably expects customers to enter into as a result of the advertising and should meet the 51% test. The 51% test assesses whether the majority of their customers get this APR rate. Only once a credit check has been carried out will you find out the exact APR that will be applied to your loan. This rate may be higher or lower than the representative APR.

Can you get car finance without a job?

Any lender will want to see that you have enough money to repay your loan. This means it's harder to get car finance if you don't have a job. But you may still be eligible if you can prove that you have an alternative source of income (from a rental property or pension for example) and can afford your monthly repayments.

Can you sell a car on finance?

You can only sell a car if you are its legal owner. That means it's fine to sell a car that you have bought with a personal loan, even if you are still repaying it.

But if you have a lease on your car, or you're on a hire purchase or PCP plan, you won't legally be able to sell it because you don't actually own the car yourself.

What credit score do you need for car finance?

Each lender will make its own decisions around who it will lend to. That means there is no minimum credit score you need to be eligible for car finance.

Generally though, you will need a good credit score to be eligible for car finance from mainstream lenders. If you have a bad credit score you may have to use a lender that specialises in lending to people with poor credit histories and pay a higher rate of interest.

What is a reputable dealer?

A reputable dealer is a dealer who you can trust – they have a good customer base, and will be professional in manner. You get peace of mind when looking for car finance deals through CarFinance247 as they only work with reputable dealers.

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Confused.com’s car finance journey is provided by CarFinance 247. Car Finance 247 is a trading name of CarFinance247 Limited. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. (Registration Number 06035525). CarFinance247 Limited is authorised and regulated by the Financial Conduct Authority. Car Finance 247 Limited is a credit broker, not a lender and looks to find the best rate from their panel of lenders offering you the best deal that you’re eligible for. Car Finance 247 Limited don’t charge a fee for their service, but do earn a commission. This does not influence the interest rate you’re offered in any way.