Car finance

Find the right car loan deal for you

Rates from 9.9%. Representative 19.9% APR.

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.

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.

  • Find the right deal for you with our trusted partner CarFinance 247
  • Get a finance quote without affecting your credit score
  • Make monthly repayments with no financial lump sum to pay 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 doesn'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 and 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 100,000 cars from across their trusted dealer network.

Once you’ve requested a quote, you 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.

CarFinance 247 searches their panel of trusted lenders to present you with a quote over the phone with the best overall value. Account managers can also discuss alternative options to fit your circumstances over the telephone.

CarFinance 247 customers rate them 4.9/5 on Trustpilot*.

*Correct as of December 2023

What is car finance?

Car finance is a method of purchasing a car that lets you spread the cost across monthly payments. You borrow the funds to buy the car then pay the money back in regular instalments. This type of loan comes in several forms:

  • Hire Purchase (HP)

  • Personal Contract Purchase (PCP)

  • Car loan

Confused car finance illustration light orange

What are the different types of car finance?

There are several finance options available:

Hire Purchase (HP)

Hire purchase deals start with a deposit, usually around 10% of the car's value. This is followed by regular, monthly payments until you've paid off the car in full. Once you've made your final payment, the car is yours.

HP deals usually last for 12 - 60 months and often require a deposit at the start. Some deals have a limit on how many miles you can drive so be sure to check with the finance company.

Confused Hire Purchase

Personal contract purchase (PCP)

Personal contract purchase or PCP is a similar form of finance to HP. A deposit is usually required and deals can last from 36 - 60 months. PCP deals tend to be cheaper than HP. This is because you're paying off the depreciation of the car, not it's value.

When your repayments come to an end, there are several options available to you:

  • If you want to own the car, you have to pay a ‘balloon payment’. This covers the cost of owning the car outright.

  • Return the car to the finance company.

  • Exchange the car for a new car on a fresh PCP deal.

Confused Personal Contract Purchase PCP

Car loans

A car loan, also known as a personal loan or an unsecured loan, lets you borrow a one-off lump sum. You can pay this back in monthly instalments. A loan can help you buy a car outright and spread the repayment costs. This is done over a term usually between 12 and 60 months (or longer) but can depend on your monthly payment plan.

Buying a car this way means you own the car straight away and won't have any restrictions on how many miles you drive.

Confused Car Loan

What type of car finance is best for me?

When deciding what type of finance to choose, consider the following:

  • How much can you afford to pay back every month?

  • How much do you want to borrow?

  • Are you able to put down a deposit?

  • 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 options:

Hire purchasePersonal contract purchasePersonal loan
Requires initial depositUsually requires depositUsually requires depositNo
You own the car outrightNoNoYes
Car is yours at the end of the agreementYesYou 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 paymentsYesYesYes
Optional balloon (final) paymentNoYesNo
Excess mileage chargesNoYesNo
Secure against an asset (eg car)YesYesNo

Find the right car finance deal for you

Representative APR 19.9%

What is APR?

APR stands for annual percentage rate. It's the total amount you 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 finance quote, you see 2 types of APR - guaranteed APR and representative APR.

Guaranteed APR

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

Representative APR

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

What affects the price of car loan payments?

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 APR.

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.

How much does car finance cost?

How much you pay depends on a number of factors including:

  • What type of finance you choose. PCP usually has cheaper monthly payments than HP but it can be more expensive overall. Especially if you choose to pay the ‘balloon payment’ to keep the car.

  • How much you borrow. The maximum amount you can borrow with car finance is £36,000 or £50,000 with a personal loan. The amount you're able to borrow can depend on factors such as personal circumstances and your financial history.

  • Your loan term. A longer repayment plan could mean cheaper monthly fees. But this could also mean you pay more interest compared to a shorter period of time. It's also possible to repay your loan earlier than agreed but this depends on the lender. Early repayment could also incur additional fees.

  • Your interest rate. Also known as APR, lenders use this to calculate how much money they add to the cost of your finance deal. Your interest rate is partly decided by your credit rating and financial history.

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

DepositRemaining loan value to be paid over 60 monthsAPR rate

With this rate, the loan would cost you:

Monthly cost of loan (including 19.9% APR)Total APR costs due across loan periodTotal cost of loan

How much can I borrow?

Check what your monthly repayments are likely to be

What do I need to get a quote?

To make things a little easier, have the following ready:

  • Your occupation

  • Your current UK address

  • Your monthly income

  • How much you'd like to borrow

  • A contact phone number and email address

When you get a quote, CarFinance 247 runs a soft credit check. They then show you lenders who can make you a car finance offer.

This is a type of credit search that is a way of finding out how eligible you are for a loan. This is done without leaving a mark on your credit report.

Can I apply for car finance with bad credit?

Yes, you can apply for car finance if you have a bad credit rating. But, you can expect to pay higher interest rates due to your low credit score. It also means you might have a limited number of deals available to you.

If you experience repayment difficulties, we recommend speaking to your lender as soon as possible. They may be able to help in some way and offer you options on how to proceed.

You should always try to make your monthly repayments. Here are some of the negative effects of missing a payment:

  • It could harm your credit score

  • It could leave a permanent mark on your credit history

  • You could get a County Court Judgement (CCJ)

  • You could find it difficult to borrow in the future

  • Any future loans you do take out are likely to be more expensive

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

What our car finance expert says

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Car finance guides

Warning over mis-sold car finance deals -

Experts claim thousands of car buyers could have been mis-sold finance packages by their motor dealers. We explain how you might have been affected.

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Can I sell a car with outstanding finance? -

Want to sell your car but you’re still paying for it? We explain when and how you can sell a car that has outstanding finance.

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Voluntary termination: how to end PCP early -

Looking to end your car finance agreement now and potentially get a new contract? If you want to cancel a HP or PCP deal early, here's what you need to know.

Read More’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 deal from their panel of lenders. Car Finance 247 Limited earn a commission for providing their services, but this does not influence the interest rate you’re offered in any way.