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We go to these trusted car finance providers.
Introduction to car finance
The term car finance covers several types of loan you can take out when purchasing a car. Most deals require an initial deposit followed by set monthly payments.
By spreading the cost over time, it's a great way to avoid paying for a car all in one go. Much like other types of loan, interest rates tend to apply, as well as extra fees. This makes shopping around for the right deal vitally important.
Looking for a car finance deal?
Not sure what finance is right for you?
We're here to help. This handy table should aid your decision.
Hire Purchase (HP)
Hire purchase or HP is an arrangement where you hire the car from a finance company until you’ve fully paid for it. The finance company own the vehicle until the final payment is made, after which time it’s yours to keep. Hire purchase tends to require a deposit usually 10% of the car’s value. The higher the deposit, the lower the monthly payments.
Personal Contract Purchase (PCP)
Personal contract purchase or PCP is similar to a hire purchase. You’re likely to be asked to pay an initial deposit, and then monthly payments for a set period. The higher your deposit, generally, the lower the monthly payments. Even with the deposit though, monthly payments are typically lower than you’d find with a hire purchase deal or a personal loan. This is because you'll be paying off the value of the depreciation of the car, not the full value of the car.
At the end of the agreement, if you decide you want to keep the car, you’ll need to pay what’s known as a ‘balloon payment’. This covers the cost of the vehicle and transfers ownership from the finance company to you. If you don’t want to keep the vehicle, you can give it back, or start a new PCP deal and get a new car.
A personal loan sometimes called an unsecured loan, allows you to borrow a lump sum over a fixed term. This loan isn’t secured against anything. That means if you use a personal loan to pay for your car, you’ll own it outright from the day the money is transferred to the dealer. As such, you can sell the vehicle at any time, without needing to settle up with the finance company first. If you think this type of loan would be a better option for you then you may want to visit our page to compare loans.
Why compare car finance quotes with Confused.com?
Unlike many sites, once you’ve entered your details we’ll be able to show you the exact APR that you’ll be offered for your loan or hire purchase deal - what you see is what you get.
As well as showing you options for exact APR, we’ll show you providers who quote based on representative APR and display the likelihood of acceptance too. Our guide on representative APR vs exact APR explains the difference.
Knowing the exact APR means it’ll be easier to manage your budget and make sure you get the best deal.
If you'd like to learn more about the options available to you, our car finance articles section might have what you need.
You may also like to use our car finance calculator to help you get an idea of what your monthly repayments are likely to be.
Everyone has a different financial situation, so there's no 'one size fits all' with financing your next car.
Before you start looking for a car loan, you'll need to think about a few questions, such as:
- Do you have any savings for a deposit?
- How much can you afford to pay back each month?
- How much do you want to borrow?
- What's your credit history like?
Once you've answered these questions, you'll be in a much better position to choose the best way to finance your next car.
- Are you likely to change your car again within the next three years?
- Have you chosen the car yet?
- Is it a private sale, or through a dealer?
- How much are you looking to spend?
- Your current UK address
- A contact phone number and email address
- Annual income
- General outgoings
Confused.com is a credit broker, not a lender. Our website makes it easy for you to compare a wide variety of car finance products, all from a range of trusted providers. If you decide to buy through us, we get a small fee from one of these providers. Comparing with us costs you nothing! And please note, the size of the provider’s fee doesn’t affect how we display our products.
Using Confused.com will not affect your credit rating as only soft searches will be carried out.
Does applying for car finance affect my credit score?
When you get a car finance quote from us, you'll see a number of products offered by our providers/lenders. To get to this stage, we run what's called a soft credit search.
This type of credit search doesn't affect your credit score and is also not shared with potential lenders, just the broker (us).
The only time your credit score and history is shared with a lender will be when you choose to purchase a car finance product and the lender you've chosen to purchase from will then conduct a full/hard credit check.
If you're concerned about your credit rating due to multiple debt payments, you might like to pay our debt consolidation page a visit.
Need more help? Take a look at our expert guides
A look at your rights of voluntary termination.
What you need to know before you sell your car.
Got credit issues? There may still be hope.
Confused about your options? We're here to help.
Everything you need to know about PCH.
Common problems to watch out for.
Questions and answers
What our car finance customers think
"Very straight forward and easy to use. It's a quick way to see what you can borrow and how much you'll pay back, and find the best option for your situation"
"The site quickly offered alternative quotes for different types of finance and was very helpful."
"Easy to use, easy to compare, quick and simple."
"Easy to use. Just a great way to get your best quotes."
"The rates shown were the actual rates offered not like the big banks."